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Proposed Rules - 76 FR 51202 - Patient Protection and Affordable

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					                                                   51202                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   DEPARTMENT OF HEALTH AND                                   Please allow sufficient time for mailed            SUPPLEMENTARY INFORMATION:     A detailed
                                                   HUMAN SERVICES                                          comments to be received before the                    Preliminary Regulatory Impact Analysis
                                                                                                           close of the comment period.                          associated with this proposed rule is
                                                   45 CFR Parts 155 and 157                                   3. By express or overnight mail. You               available at http://cciio.cms.gov under
                                                   [CMS–9974–P]                                            may send written comments to the                      ‘‘Regulations and Guidance.’’ A
                                                                                                           following address ONLY:                               summary of the aforementioned analysis
                                                   RIN 0938–AR25                                              Centers for Medicare & Medicaid                    is included as part of this proposed rule.
                                                                                                           Services, Department of Health and                    Abbreviations
                                                   Patient Protection and Affordable Care                  Human Services, Attention: CMS–9974–
                                                   Act; Exchange Functions in the                          P, Mail Stop C4–26–05, 7500 Security                  CHIP Children’s Health Insurance Program
                                                   Individual Market: Eligibility                          Boulevard, Baltimore, MD 21244–1850.                  CMS Centers for Medicare & Medicaid
                                                   Determinations; Exchange Standards                         4. By hand or courier. Alternatively,                Services
                                                   for Employers                                                                                                 DOL U.S. Department of Labor
                                                                                                           you may deliver (by hand or courier)                  ERISA Employee Retirement Income
                                                   AGENCY:  Department of Health and                       your written comments ONLY to the                       Security Act (29 U.S.C. section 1001, et
                                                   Human Services.                                         following addresses prior to the close of               seq.)
                                                   ACTION: Proposed rule.                                  the comment period:                                   FPL Federal Poverty Level
                                                                                                              a. For delivery in Washington, DC—                 HHS U.S. Department of Health and Human
                                                   SUMMARY:    This proposed rule would                    Centers for Medicare & Medicaid                         Services
                                                   implement certain functions of the new                  Services, Department of Health and                    HMO Health Maintenance Organization
                                                                                                                                                                 IHS Indian Health Service
                                                   Affordable Insurance Exchanges                          Human Services, Room 445–G, Hubert                    IRS Internal Revenue Service
                                                   (‘‘Exchanges’’), consistent with title I of             H. Humphrey Building, 200                             NAIC National Association of Insurance
                                                   the Patient Protection and Affordable                   Independence Avenue, SW.,                               Commissioners
                                                   Care Act of 2010, as amended by the                     Washington, DC 20201.                                 OMB Office of Management and Budget
                                                   Health Care and Education                                  (Because access to the interior of the             OPM Office of Personnel Management
                                                   Reconciliation Act of 2010, referred to                 Hubert H. Humphrey Building is not                    PHS Act Public Health Service Act
                                                   collectively as the Affordable Care Act.                readily available to persons without                  QHP Qualified Health Plan
                                                                                                                                                                 SHOP Small Business Health Options
                                                   The Exchanges will provide competitive                  Federal government identification,                      Program
                                                   marketplaces for individuals and small                  commenters are encouraged to leave                    SSA Social Security Administration
                                                   employers to directly compare available                 their comments in the CMS drop slots                  The Act Social Security Act
                                                   private health insurance options on the                 located in the main lobby of the                      The Code Internal Revenue Code of 1986
                                                   basis of price, quality, and other factors.             building. A stamp-in clock is available                  Executive Summary: Starting in 2014,
                                                   The Exchanges, which will become                        for persons wishing to retain a proof of              individuals and small businesses will be
                                                   operational by January 1, 2014, will                    filing by stamping in and retaining an                able to purchase private health
                                                   help enhance competition in the health                  extra copy of the comments being filed.)              insurance through State-based
                                                   insurance market, improve choice of                        b. For delivery in Baltimore, MD—                  competitive marketplaces called
                                                   affordable health insurance, and give                   Centers for Medicare & Medicaid                       Affordable Insurance Exchanges, or
                                                   small businesses the same purchasing                    Services, Department of Health and                    ‘‘Exchanges.’’ Exchanges will offer
                                                   clout as large businesses. The specific                 Human Services, 7500 Security                         Americans competition, choice, and
                                                   Exchange functions proposed in this                     Boulevard, Baltimore, MD 21244–1850.                  clout. Insurance companies will
                                                   rule include: Eligibility determinations                   If you intend to deliver your                      compete for business on a level playing
                                                   for Exchange participation and                          comments to the Baltimore address, call               field, driving down costs. Consumers
                                                   insurance affordability programs and                    telephone number (410) 786–9994 in                    will have a choice of health plans to fit
                                                   standards for employer participation in                 advance to schedule your arrival with                 their needs. And Exchanges will give
                                                   SHOP.                                                   one of our staff members.                             individuals and small businesses the
                                                   DATES: To be assured consideration,                        Comments erroneously mailed to the                 same purchasing clout as big businesses.
                                                   comments must be received at one of                     addresses indicated as appropriate for                The Departments of Health and Human
                                                   the addresses provided below, no later                  hand or courier delivery may be delayed               Services, Labor and the Treasury (the
                                                   than 5 p.m. Eastern Standard Time                       and received after the comment period.                Departments) are working in close
                                                   (EST) on October 31, 2011.                                 Submission of comments on                          coordination to release guidance related
                                                   ADDRESSES: In commenting, please refer                  paperwork requirements. You may                       to Exchanges. The first in this series was
                                                   to file code CMS–9974–P. Because of                     submit comments on this document’s                    a Request for Comment relating to
                                                   staff and resource limitations, we cannot               paperwork requirements by following                   Exchanges, published in the Federal
                                                   accept comments by facsimile (FAX)                      the instructions at the end of the                    Register on August 3, 2010 (75 FR
                                                   transmission.                                           ‘‘Collection of Information                           45584). Second, Initial Guidance to
                                                      You may submit comments in one of                    Requirements’’ section in this                        States on Exchanges was issued on
                                                   four ways (please choose only one of the                document. For information on viewing                  November 18, 2010. Third, a proposed
                                                   ways listed):                                           public comments, see the beginning of                 rule for the application, review, and
                                                      1. Electronically. You may submit                    the SUPPLEMENTARY INFORMATION section.                reporting process for waivers for State
                                                   electronic comments on this regulation                  FOR FURTHER INFORMATION CONTACT:                      innovation was published in the
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                                                   to http://www.regulations.gov. Follow                      Laurie McWright at (301) 492–4372                  Federal Register on March 14, 2011
                                                   the ‘‘Submit a comment’’ instructions.                  for general information matters.                      (76 FR 13553). Fourth, two proposed
                                                      2. By regular mail. You may mail                        Alissa DeBoy at (301) 492–4428 for                 regulations were published in the
                                                   written comments to the following                       general information and matters related               Federal Register on July 15, 2011 (76 FR
                                                   address ONLY: Centers for Medicare &                    to part 155.                                          41866 and 76 FR 41930) to implement
                                                   Medicaid Services, Department of                           Michelle Strollo at (301) 492–4429 for             components of the Exchange and health
                                                   Health and Human Services, Attention:                   matters related to eligibility.                       insurance premium stabilization
                                                   CMS–9974–P, P.O. Box 8010, Baltimore,                      Naomi Senkeeto at (301) 492–4419 for               policies in the Affordable Care Act.
                                                   MD 21244–8010.                                          matters related to part 157.                          Fifth, a proposed regulation for the


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                          51203

                                                   establishment of the Consumer                              Submitting Comments: We welcome                    purchase of insurance coverage by
                                                   Operated and Oriented Plan (CO–OP)                      comments from the public on issues set                qualified individuals through qualified
                                                   Program under section 1322 of the                       forth in this proposed rule to assist us              health plans (QHPs).
                                                   Affordable Care Act was published in                    in fully considering issues and                          Section 1401 of the Affordable Care
                                                   the Federal Register on July 20, 2011                   developing policies. Comments will be                 Act creates new section 36B of the
                                                   (76 FR 43237). Sixth, three proposed                    most useful if they are organized by the              Internal Revenue Code (the Code),
                                                   rules, including this one, are being                    section of the proposed rule to which                 which provides for a premium tax credit
                                                   published in the Federal Register on                    they apply. You can assist us by                      for eligible individuals who enroll in a
                                                   August 17, 2011 to provide guidance on                  referencing the file code [CMS–9974–P]                QHP through an Exchange. Section 1402
                                                   the eligibility determination process                   and the specific ‘‘issue identifier’’ that            establishes provisions to reduce the
                                                   related to enrollment in a qualified                    precedes the section on which you                     cost-sharing obligation of certain
                                                   health plan, advance payments of the                    choose to comment.                                    eligible individuals enrolled in a QHP
                                                   premium tax credit, cost-sharing                           Inspection of Public Comments: All                 offered through an Exchange.
                                                   reductions, Medicaid, the Children’s                    comments received before the close of                    Under section 1411 of the Affordable
                                                   Health Insurance Program (CHIP), and                    the comment period are available for                  Care Act, the Secretary is directed to
                                                   participation in SHOP.                                  viewing by the public, including any                  establish a program for determining
                                                      45 CFR 155.200(c) proposes that the                  personally identifiable or confidential               whether an individual meets the
                                                   Exchange perform eligibility                            business information that is included in              eligibility standards for Exchange
                                                   determinations. This rule proposes the                  a comment. We post all electronic                     participation, advance payments of the
                                                   specific standards for the Exchange                     comments received before the close of                 premium tax credit, cost-sharing
                                                   eligibility process, in order to                        the comment period on the following                   reductions, and exemptions from the
                                                   implement sections 1311, 1312, 1411,                    public Web site as soon as possible after             individual responsibility provision.
                                                   1412, and 1413 of the Affordable Care                   they have been received at http://                       Sections 1412 and 1413 of the
                                                   Act. Further, it supports and                           www.regulations.gov. Follow the search                Affordable Care Act and section 1943 of
                                                   complements rulemaking conducted by                     instructions on that Web site to view                 the Social Security Act (the Act), as
                                                   the Secretary of the Treasury with                      public comments. Comments received                    added by section 2201 of the Affordable
                                                   respect to section 36B of the Internal                  timely will be available for public                   Care Act, contain additional provisions
                                                   Revenue Code (the Code), as added by                    inspection as they are received,                      regarding eligibility for advance
                                                   section 1401(a) of the Affordable Care                  generally beginning approximately 3                   payments of the premium tax credit and
                                                   Act, and by the Secretary of HHS with                   weeks after publication of a document,                cost-sharing reductions, as well as
                                                   respect to several sections of the                      at Room 445–G, Department of Health                   provisions regarding simplification and
                                                   Affordable Care Act regarding Medicaid                  and Human Services, Hubert H.                         coordination of eligibility
                                                   and CHIP. This proposed rule also                       Humphrey Building, 200 Independence                   determinations and enrollment with
                                                   contains standards for employers with                   Avenue, SW., Washington, DC 20201,                    other health programs. These provisions
                                                   respect to participation in the Small                   Monday through Friday of each week                    of the Affordable Care Act are addressed
                                                   Business Health Options Program                         from 8:30 a.m. to 4 p.m. To schedule an               in subpart D of part 155 in this rule.
                                                   (SHOP), paralleling the Exchange                        appointment to view public comments,                     Section 1402 of the Affordable Care
                                                   standards for SHOP set forth in the                     call 1–800–743–3951.                                  Act outlines standards for determining
                                                   previous Exchange rule.                                                                                       Indians eligible for certain categories of
                                                      The aforementioned sections of the                   Table of Contents                                     cost-sharing reductions.
                                                   Affordable Care Act create a central role               I. Background                                            Unless otherwise specified, the
                                                   for the Exchange in the process of                         A. Legislative Overview                            provisions in this proposed rule related
                                                   determining an individual’s eligibility                    B. Request for Comment                             to the establishment of minimum
                                                   for enrollment in a qualified health plan                  C. Structure of the Proposed Rule                  functions of an Exchange are based on
                                                   (QHP), as well as for ‘‘insurance                       II. Provisions of the Proposed Regulation             the general authority of the Secretary
                                                   affordability programs.’’ In this                          A. Part 155—Exchange Establishment                 under section 1321(a)(1) of the
                                                                                                                 Standards and Other Related Standards
                                                   proposed rule, ‘‘insurance affordability                      Under the Affordable Care Act                   Affordable Care Act.
                                                   programs’’ is used to refer to advance                     1. Subpart D—Exchange Functions in the
                                                   payments of the premium tax credit,                                                                           B. Stakeholder Consultation and Input
                                                                                                                 Individual Market: Eligibility
                                                   cost-sharing reductions, Medicaid,                            Determinations for Exchange                       On August 3, 2010, HHS published a
                                                   CHIP, and any State-established Basic                         Participation and Insurance Affordability       Request for Comment (the RFC) inviting
                                                   Health Program, if applicable, as                             Programs                                        the public to provide input regarding
                                                   defined in 42 CFR 435.4 of the Medicaid                    B. Part 157—Employer Interactions With             the rules that will govern the Exchanges.
                                                   proposed rule. We interpret Affordable                        Exchanges and SHOP Participation                In particular, HHS asked States, tribal
                                                                                                              1. Subpart A—General Provisions                    representatives, consumer advocates,
                                                   Care Act sections 1311(d)(4)(F), and                       2. Subpart B—Reserved
                                                   1413, and section 1943 of the Act, as                      3. Subpart C—Standards for Qualified               employers, insurers, and other
                                                   added by section 2201 of the Affordable                       Employers                                       interested stakeholders to comment on
                                                   Care Act, to establish a system of                      III. Collection of Information Requirements           the types of standards Exchanges should
                                                   streamlined and coordinated eligibility                 IV. Summary of Regulatory Impact Analysis             meet. The comment period closed on
                                                   and enrollment through which an                         V. Regulatory Flexibility Act                         October 4, 2010. While this proposed
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                                                   individual may apply for enrollment in                  VI. Unfunded Mandates                                 rule does not directly respond to
                                                   a QHP and insurance affordability                       VII. Federalism                                       comments from the RFC, the comments
                                                   programs and receive a determination of                 I. Background                                         received are described, where
                                                   eligibility for such programs. We also                                                                        applicable, in discussing specific
                                                   interpret section 1413(b)(2) to mean that               A. Legislative Overview                               regulatory proposals.
                                                   the eligibility and enrollment function                   Section 1311(b) and section 1321 of                   The public response to the RFC
                                                   should be consumer-oriented,                            the Affordable Care Act outline                       yielded comment submissions from
                                                   minimizing administrative hurdles and                   provisions for the establishment of                   consumer advocacy organizations,
                                                   unnecessary paperwork for applicants.                   Exchanges that will facilitate the                    medical and health care professional


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                                                   51204                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   trade associations and societies, medical               II. Provisions of the Proposed                        unnecessary paperwork. We note that
                                                   and health care professional entities,                  Regulation                                            these approaches were supported by
                                                   health insurers, insurance trade                                                                              comments that we received in response
                                                                                                           A. Part 155—Exchange Establishment
                                                   associations, members of the general                                                                          to the RFC. One option that we
                                                                                                           Standards and Other Related Standards
                                                   public, and employer organizations. The                                                                       considered was whether to establish a
                                                                                                           Under the Affordable Care Act
                                                   majority of the comments were related                                                                         system in which the Secretary of HHS
                                                   to the general functions and standards                  1. Subpart D—Exchange Functions in                    would determine eligibility for advance
                                                   for Exchanges, QHPs, eligibility and                    the Individual Market: Eligibility                    payments of the premium tax credit,
                                                   enrollment, and coordination with                       Determinations for Exchange                           with other eligibility and enrollment
                                                   Medicaid. We intend to respond to                       Participation and Insurance                           functions remaining as the
                                                                                                           Affordability Programs                                responsibility of the Exchange, since
                                                   comments from the RFC, along with
                                                                                                              Under the Affordable Care Act,                     premium tax credits are fully Federally-
                                                   comments received on this proposed
                                                                                                           Exchanges will make QHPs available to                 funded and the rules are the same across
                                                   rule, as part of the final rule.                                                                              all States. However, we chose not to
                                                                                                           qualified individuals. In accordance
                                                      In addition to the RFC, HHS has                                                                            take this approach, because isolating
                                                                                                           with our interpretation of the sections of
                                                   consulted with stakeholders through                                                                           one component of the eligibility
                                                                                                           the Affordable Care Act described
                                                   regular meetings with the National                      below; the authority provided by, inter               determination process from the
                                                   Association of Insurance Commissioners                                                                        remaining eligibility and enrollment
                                                                                                           alia, section 1321(a); and 45 CFR
                                                   (NAIC), regular contact with States                                                                           functions would pose significant
                                                                                                           155.200(c), which specifies that the
                                                   through the Exchange grant process, and                                                                       challenges to ensuring a seamless
                                                                                                           Exchange will perform eligibility
                                                   meetings with tribal representatives,                                                                         experience for applicants. It would also
                                                                                                           determinations; we propose that the
                                                   health insurance issuers, trade groups,                                                                       limit the role of State Exchanges in this
                                                                                                           Exchange will determine eligibility for
                                                   consumer advocates, employers, and                                                                            process. We note that States may also
                                                                                                           Exchange participation, as well as for
                                                   other interested parties. This                                                                                work with HHS to leverage
                                                                                                           insurance affordability programs.
                                                   consultation will continue throughout                                                                         technological and operational
                                                                                                           Sections 1312, 1331, 1401, 1402, 2001,
                                                                                                                                                                 capabilities provided by HHS to execute
                                                   the development of Exchange guidance.                   2002, and 2201 of the Affordable Care
                                                                                                                                                                 Exchange functions in a way that will
                                                                                                           Act, by creating new law and amending                 meet the needs of individuals. We
                                                   C. Structure of the Proposed Rule
                                                                                                           existing law, in conjunction with titles              solicit comments on this approach and
                                                      The regulations outlined in this notice              XIX and XXI of the Act, set forth                     alternatives.
                                                   of proposed rulemaking will be codified                 eligibility standards for these programs                 We also note that throughout this
                                                   in 45 CFR part 155 and new part 157.                    and benefits; and sections 1311, 1411,                subpart, we propose several
                                                   Part 155 outlines the proposed                          1412, and 1413 of the Affordable Care                 transmissions of data, which we intend
                                                   standards for States relative to the                    Act create a central role for the                     to occur electronically, using secure
                                                                                                           Exchange in the process of determining                interfaces. We note that the standards
                                                   establishment of Exchanges and outlines
                                                                                                           an individual’s eligibility based on                  specified in § 155.260 and § 155.270
                                                   the proposed standards for Exchanges
                                                                                                           those standards. In subpart D, we                     regarding privacy and security apply to
                                                   related to minimum Exchange
                                                                                                           propose standards related to eligibility              any data sharing processes and
                                                   functions. Part 157 outlines the basic                  determinations for enrollment in a QHP
                                                   standards that employers must meet to                                                                         agreements under this subpart.
                                                                                                           and for insurance affordability                          The proposed eligibility process is
                                                   voluntarily participate in the Small                    programs. Throughout this subpart, we                 designed to minimize opportunities for
                                                   Business Health Options Program                         refer to Medicaid and CHIP, but we note               fraud and abuse, including the use of
                                                   (SHOP).                                                 that for those States that choose to                  clear eligibility standards and processes
                                                      Subjects included in the Affordable                  establish a Basic Health Program, all                 that rely on data sources in an electronic
                                                   Care Act addressed in prior proposed                    provisions applicable to Medicaid and                 environment. We solicit comments
                                                   rulemaking include but are not limited                  CHIP will also be generally applicable to             regarding strategies to further limit the
                                                   to: (1) Federal standards for States that               the Basic Health Program. We also note                risk for fraud and abuse, and we look
                                                   elect to establish and operate an                       that references in this subpart to                    forward to working with States toward
                                                   Exchange; (2) minimum standards for                     ‘‘Exchange’’ refer specifically to                    this goal.
                                                   health insurance issuers to participate                 functions in connection with the                         Consistent with this streamlined,
                                                   in an Exchange and offer qualified                      purchase of individual market coverage                seamless eligibility and enrollment
                                                   health plans (QHPs); and (3) basic                      through the Exchange.                                 system, the Affordable Care Act requires
                                                                                                              In 45 CFR 155.200(c) (76 FR 41866),                a simplification of Medicaid and CHIP
                                                   standards related to the establishment of
                                                                                                           we proposed that the Exchange perform                 eligibility policy and rules, which is in
                                                   the Small Business Health Options
                                                                                                           eligibility determinations. We interpret              42 CFR 435.603 and 42 CFR 457.315,
                                                   Program (SHOP).                                         Affordable Care Act sections                          proposed by the Secretary of HHS in the
                                                      Subjects included in the Affordable                  1311(d)(4)(F) and 1413, and section                   Medicaid Program; Eligibility Changes
                                                   Care Act to be addressed in future                      1943 of the Act, as added by section                  under the Affordable Care Act of 2010
                                                   separate rulemaking include but are not                 2201 of the Affordable Care Act, to                   rule, published in this issue of the
                                                   limited to: (1) Standards outlining the                 provide for the establishment of a                    Federal Register (the Medicaid
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                                                   Exchange process for issuing certificates               system of streamlined and coordinated                 proposed rule). Pursuant to the
                                                   of exemption from the individual                        eligibility and enrollment through                    Affordable Care Act, this simplification
                                                   responsibility provision and payment                    which an individual may apply for                     aligns most of the rules under which
                                                   under section 1411(a)(4); (2) defining                  insurance affordability programs and                  individuals will be determined eligible
                                                   essential health benefits, actuarial value              receive a determination of eligibility for            for Medicaid and CHIP with those for
                                                   and other benefit design standards; and                 any such program. Section 1413(b)(2)                  advance payments of the premium tax
                                                   (3) standards for Exchanges and QHP                     provides that an individual’s eligibility             credit and cost-sharing reductions, by
                                                   issuers related to quality.                             be determined without unduly                          generally using modified adjusted gross
                                                                                                           burdening the individual with                         income (MAGI) as the basis for income


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                          51205

                                                   eligibility, effective January 1, 2014.                 for child health assistance and                          We propose that the definition of the
                                                   While the use of this standard is                       enrollment in a separate child health                 term ‘‘minimum value’’ has the meaning
                                                   referenced throughout this subpart, the                 program. The applicable CHIP MAGI-                    given to the term in section 36B(c)(2)(C)
                                                   use of a MAGI-based standard for                        based standard will also vary from State              of the Code.
                                                   Medicaid and CHIP is proposed in the                    to State depending on the threshold                      We propose to define ‘‘non-citizen’’ to
                                                   Medicaid proposed rule, pursuant to                     established by the State CHIP agency.                 mean any individual who is not a
                                                   section 2002 of the Affordable Care Act,                Both 42 CFR 457.305 and 457.348(d) are                citizen or national of the United States,
                                                   and the definition of MAGI will be                      proposed in the Medicaid proposed                     which is the same meaning as the term
                                                   proposed by the Department of the                       rule.                                                 alien as defined in section 101(a)(3) of
                                                   Treasury in the Health Insurance                           We propose to define ‘‘application                 the Immigration and Nationality Act.
                                                   Premium Tax Credit rule, scheduled for                  filer’’ to mean an individual who                        We propose to define ‘‘primary
                                                   publication in this issue of the Federal                submits an application for health                     taxpayer’’ to mean an individual who
                                                   Register.1                                              insurance coverage to the Exchange and                (1) attests that he or she will file a tax
                                                      In this subpart, we have organized the               responds to inquiries about the                       return for the benefit year, in
                                                   standards we propose for the Exchange                   application. An application filer may be              accordance with 26 CFR 1.6011–8; (2) if
                                                   in determining eligibility as follows:                  an applicant or a non-applicant, and                  married (within the meaning of 26 CFR
                                                   Eligibility standards, eligibility                      may or may not be a primary taxpayer.                 1.7703–1), attests that he or she expects
                                                   determination process, and applicant                       We propose to define ‘‘Federal                     to file a joint tax return for the benefit
                                                   information verification process.                       Poverty Level’’ (FPL) to mean the most                year; (3) attests that he or she expects
                                                                                                           recently published FPL, updated                       that no other taxpayer will be able to
                                                   a. Definitions and General Standards for                periodically in the Federal Register by               claim him or her as a tax dependent for
                                                   Eligibility Determinations (§ 155.300)                  the Secretary of Health and Human                     the benefit year; and (4) attests that he
                                                      In this section, we propose definitions              Services under the authority of 42                    or she expects to claim a personal
                                                   for this subpart. We note that virtually                U.S.C. 9902(2), as of the first day of the            exemption deduction on his or her tax
                                                   all of the definitions in this section are              annual open enrollment period for                     return for the family members listed on
                                                   from other proposed regulations,                        coverage in a qualified health plan                   his or her application, including the
                                                   including many proposed in the                          through the Exchange; the open                        primary taxpayer and his or her spouse.
                                                   Establishment of Exchanges and                          enrollment period is specified in 45 CFR              We use this term in § 155.305 and
                                                   Qualified Health Plans rule, published                  155.410. This definition is used for                  § 155.320(c) of this subpart to describe
                                                   at 76 FR 41866 (July 15, 2011),                         eligibility for advance payments of the               the individual who would receive
                                                   (Exchange proposed rule).                               premium tax credit and cost-sharing                   advance payments of the premium tax
                                                      In paragraph (a), we propose the                     reductions, and matches the definition                credit and would file a tax return to
                                                   definition for ‘‘adoption taxpayer                      in the Treasury proposed rule. We note                reconcile such advance payments.
                                                   identification number’’ to have the same                that the Medicaid proposed rule does                     We propose to define ‘‘State CHIP
                                                   meaning as it does in 26 CFR 301.6109–                  not specify that FPL is based on the data             Agency’’ to mean the agency that
                                                   3(a).                                                   published as of the first day of the                  administers a separate child health
                                                      We propose the definition for                        Exchange open enrollment period,                      program established by the State under
                                                   ‘‘applicable Medicaid modified adjusted                 which means that the FPL table used in                Title XXI of the Act in accordance with
                                                   gross income (MAGI)-based income                        eligibility determinations for Medicaid               implementing regulations at 42 CFR part
                                                   standard’’ to have the same meaning as                  and CHIP may be different from that                   457.
                                                   ‘‘applicable Medicaid modified adjusted                 used for advance payments of the                         We propose to define ‘‘State Medicaid
                                                   gross income standard’’ as defined in 42                premium tax credit and cost-sharing                   Agency’’ to mean the agency that
                                                   CFR 435.911(b), applied under the State                 reductions, depending on the date of the              administers a Medicaid program
                                                   Medicaid plan or waiver of such plan,                   eligibility determination. However, we                established by the State under Title XIX
                                                   and as certified by the State Medicaid                  note that for the annual open enrollment              of the Act in accordance with
                                                   agency pursuant to 42 CFR                               period for coverage, the FPL tables for               implementing regulations at 42 CFR
                                                   435.1200(c)(2), for determining                         Medicaid, CHIP, and advance payments                  430.
                                                   Medicaid eligibility. Both 42 CFR                       of the premium tax credit and cost-                      We propose to define ‘‘tax
                                                   435.911(b) and 435.1200(c)(2) are                       sharing reductions should be the same.                dependent’’ to mean a dependent in
                                                   proposed in the Medicaid proposed                          For purposes of determining                        accordance with section 152 of the
                                                   rule.                                                   eligibility for cost-sharing provisions,              Code.
                                                      In support of our proposal that the                  we propose to codify the definition of                   In paragraph (b), we propose to clarify
                                                   Exchange determine an applicant’s                       ‘‘Indian’’ to mean any individual                     that, in general, references to Medicaid
                                                   eligibility for CHIP, we propose to                     defined in section 4(d) of the Indian                 and CHIP regulations in this subpart
                                                   define ‘‘applicable CHIP modified                       Self-Determination and Education                      refer to Medicaid and CHIP State plan
                                                   adjusted gross income (MAGI)-based                      Assistance Act (ISDEAA) (Pub. L. 93–                  provisions implementing those
                                                   income standard’’ as the income                         638, 88 Stat. 2203), in accordance with               regulations. To the extent that the
                                                   standard applied under the State plan                   section 1402(d)(1) of the Affordable Care             regulations outlined in this section refer
                                                   under Title XXI of the Act, or waiver of                Act. This definition means an                         to Medicaid and CHIP regulations, the
                                                   such plan, as defined at 42 CFR                         individual who is a member of a                       Exchange would adhere to the rules of
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                                                   457.305(a), and as certified by the State               Federally-recognized tribe. Applicants                the Medicaid and CHIP agencies
                                                   CHIP Agency pursuant to 42 CFR                          meeting this definition are eligible for              operating within the service area of the
                                                   457.348(d), for determining eligibility                 cost-sharing reductions or special cost-              Exchange.
                                                                                                           sharing rules on the basis of Indian                     Lastly, in paragraph (c)(1), we propose
                                                     1 Section 3308 of the Affordable Care Act also
                                                                                                           status, which are described in § 155.350              that except as specified in paragraph
                                                   defines ‘‘modified adjusted gross income’’; this        of this subpart.                                      (c)(2), for purposes of this subpart, an
                                                   definition is different from the definitions that are
                                                   applicable to advance payments of the premium tax
                                                                                                              We propose to define ‘‘insurance                   attestation may be made by the
                                                   credit, cost-sharing reductions, Medicaid, and          affordability programs’’ as described                 applicant (self-attestation), an
                                                   CHIP.                                                   earlier in this section.                              application filer, or in cases in which an


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                                                   51206                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   individual cannot attest, the attestation               an individual must not be incarcerated,               where he or she is living, and expect
                                                   of a parent, caretaker, or someone acting               with the exception of incarceration                   that he or she must also maintain the
                                                   responsibly on behalf of such an                        pending the disposition of charges.                   present intent to reside in the State
                                                   individual. In paragraph (c)(2), we                        In paragraph (a)(3), we propose the                within the service area of the Exchange
                                                   propose that the attestations specified in              standard regarding residency. Section                 that is being claimed. Along these lines
                                                   § 155.310(d)(2)(ii) and                                 1312(f) of the Affordable Care Act                    and in accordance with the language in
                                                   § 155.315(e)(4)(ii), which result in the                provides that in order to enroll in a                 section 1312(f)(3) of the Affordable Care
                                                   authorization of advance payments of                    QHP, an individual must reside in the                 Act, which we interpret to allow an
                                                   the premium tax credit, must be made                    State that established the Exchange.                  applicant to request coverage for less
                                                   by the primary taxpayer. This is because                When discussing the residency standard                than a full calendar year, we clarify that
                                                   these attestations are designed to ensure               for the Exchange, we use the term                     this residency standard does not require
                                                   that the primary taxpayer appreciates                   ‘‘service area of the Exchange’’ to                   an individual to intend to reside for the
                                                   and accepts the tax consequences that                   account for regional or subsidiary                    entire benefit year. In paragraph
                                                   follow from receipt of advance                          Exchanges that serve broader or                       (a)(3)(ii), we propose that an individual
                                                   payments.                                               narrower geographic areas than a single               under age 21 who is not
                                                                                                           State, as well as for situations in which             institutionalized, is not receiving
                                                   b. Eligibility Standards (§ 155.305)                    a Federally-facilitated Exchange is                   payments under Title IV–E of the Act
                                                      In § 155.305, we propose to codify the               operating in a State. We clarify that this            (such as foster care assistance and
                                                   eligibility standards for enrollment in a               residency standard is designed to apply               adoption assistance), is not
                                                   QHP and for insurance affordability                     to all Exchanges, including regional and              emancipated, and is not receiving a
                                                   programs.                                               subsidiary Exchanges. In order to codify              State supplementary payment, meets the
                                                      In paragraph (a), we propose that the                the residency standard of section 1312(f)             residency standard for enrollment in a
                                                   Exchange determine an applicant                         to take account of the options under                  QHP if he or she resides within the
                                                   eligible for enrollment in a QHP if he or               sections 1311(f)(1) and 1311(f)(2), in                service area of the Exchange through
                                                   she meets the basic standards for                       paragraph (a)(3)(i), we propose that an               which he or she is requesting coverage,
                                                   enrollment in a QHP, which are taken                    individual aged 21 or older who is not                to account for situations in which an
                                                   from section 1312(f) of the Affordable                  institutionalized, is capable of                      individual under age 21 is unable to
                                                   Care Act. First, in paragraph (a)(1), we                indicating intent, and is not receiving a             express intent.
                                                   propose to codify section 1312(f)(3) that               State supplementary payment (State-                      We note that Medicaid has adopted a
                                                   in order to be eligible for enrollment in               funded cash assistance for certain                    number of additional rules regarding
                                                   a QHP, an individual must be a citizen,                 individuals receiving SSI) meets the                  residency for special populations,
                                                   national, or a non-citizen lawfully                     residency standard for enrollment in a                including institutionalized individuals,
                                                   present, and be reasonably expected to                  QHP if the applicant intends to reside                individuals receiving Title IV–E
                                                   remain so for the entire period for                     in the State within the service area of               payments, individuals receiving State
                                                   which enrollment is sought. In proposed                 the Exchange through which the                        supplementary payments, individuals
                                                   § 155.20, the term ‘‘lawfully present’’ is              individual is requesting coverage.                    incapable of expressing intent, and
                                                   adopted as defined in 45 CFR 152.2.                        In general, we propose to align the                emancipated minors. In paragraph
                                                   Since the Exchange will also be                         Exchange residency standard with the                  (a)(3)(iii) of this section, we propose that
                                                   determining eligibility for Medicaid and                residency standards proposed for                      the Exchange follow these Medicaid
                                                   CHIP, we intend to align the                            Medicaid, which are proposed in 42                    residency standards (which are
                                                   requirements for lawful presence with                   CFR 435.403 of the Medicaid proposed                  proposed in the Medicaid proposed rule
                                                   that of the State option for Medicaid and               rule. Such Medicaid residency                         at 42 CFR 435.403) and the policy of the
                                                   CHIP under section 1903(v)(4) of the                    standards include an ‘‘intent to reside’’             State Medicaid or CHIP agency to the
                                                   Act, as added by section 214 of the                     standard. This ‘‘intent to reside’’                   extent that an individual is specifically
                                                   Children’s Health Insurance Program                     standard applies to individuals 21 and                described in that section and not in
                                                   Reauthorization Act (Pub. L. 111–3, 123                 over who are seeking coverage through                 paragraphs (a)(3)(i) or (ii). We continue
                                                   Stat. 8); to the extent that the Secretary              the Exchange and who intend to reside                 to work across HHS to ensure that the
                                                   amends the definition for Medicaid and                  within the service area of the Exchange               Exchange, Medicaid, and CHIP can
                                                   CHIP in future rulemaking, we intend to                 provided that an individual does not fall             reach a definition or set of definitions of
                                                   adjust the Exchange rules accordingly.                  into special residency categories                     residency that will enable a uniform
                                                      We solicit comments regarding the                    described in paragraph (a)(3)(iii). This              eligibility determination process for the
                                                   codified language in paragraph (a)(1)                   phrase precludes visitors to the service              vast majority of individuals to reduce
                                                   that an individual be ‘‘reasonably                      area of an Exchange from meeting the                  complexity and confusion for all
                                                   expected,’’ for the entire period for                   residency standard, but accommodates                  involved parties; we solicit comments
                                                   which enrollment is sought, to be a                     those individuals who may transition                  on this topic.
                                                   citizen, national, or non-citizen lawfully              between service areas of different                       We also recognize that there are a
                                                   present, which comes directly from                      Exchanges, such as seasonal workers                   number of situations in which a tax
                                                   section 1312(f)(3) of the Affordable Care               and individuals seeking employment in                 household may include members
                                                   Act. We clarify that the period for which               the State or service area of the                      residing in different service areas served
                                                   enrollment is sought does not have to be                Exchange. This also allows individuals                by different Exchanges. In paragraph
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   an entire benefit year. In particular, we               who are absent temporarily from the                   (a)(3)(iv) of this section, we propose that
                                                   seek comment on how this policy can be                  service area of an Exchange to remain                 for a spouse or a tax dependent who
                                                   implemented in a way that is                            within the same Exchange during the                   resides outside the service area of the
                                                   straightforward for individuals to                      temporary absence. Furthermore, while                 primary taxpayer’s Exchange, such as
                                                   understand and for the Exchange to                      we do not include the words ‘‘live’’ or               when a non-custodial parent claims a
                                                   implement.                                              ‘‘living’’ in the proposed residency                  child as a tax dependent, the spouse or
                                                      In paragraph (a)(2), we propose to                   requirements, we will interpret these                 tax dependent will be permitted to
                                                   codify section 1312(f)(1)(B) that in order              proposed regulations such that an                     either: (1) Enroll in a QHP through the
                                                   to be eligible for enrollment in a QHP,                 adult’s residency will be based on                    Exchange that services the area in which


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                          51207

                                                   he or she resides or intends to reside; or                 Based on sections 1311(d)(4)(F) and                reductions that are available to certain
                                                   (2) enroll in a QHP through the                         1413 of the Affordable Care Act and                   individuals, and section 1412 of the
                                                   Exchange that services the area in which                section 1943(b)(1)(B) of the Act, we                  Affordable Care Act provides that
                                                   his or her primary taxpayer intends to                  propose that the Exchange determine                   advance payments of the premium tax
                                                   reside or resides, as applicable. In either             applicants’ eligibility for Medicaid and              credit may be made to QHP issuers on
                                                   case, if the spouse or tax dependent is                 CHIP, and enroll eligible applicants into             behalf of eligible individuals. In
                                                   covered, he or she will still count as                  these programs. In paragraph (c), we                  paragraph (f), we propose the eligibility
                                                   part of the tax household and the                       propose the criteria under which the                  standards for advance payments of the
                                                   advance payment calculation will take                   Exchange will determine eligibility for               premium tax credit. These provisions
                                                   account of the policy or policies needed                Medicaid for an applicant seeking an                  are drawn from the standards in section
                                                   to cover the tax household consistent                   eligibility determination for insurance               36B of the Code and implementing
                                                   with the rules proposed in the Treasury                 affordability programs as described in                regulations at 26 CFR 1.36B–1 through
                                                   proposed rule. We believe that this will                § 155.310(b). We propose that the                     1.36B–5, in the Treasury proposed rule.
                                                   provide flexibility to an individual who                Exchange determine an applicant’s                       First, in paragraph (f)(1), we propose
                                                   does not live in the service area of the                eligibility for Medicaid for eligibility              the eligibility standards for a primary
                                                   Exchange in which his or her primary                    categories that use the applicable                    taxpayer, as defined in § 155.300(a), to
                                                   taxpayer lives but want to remain in the                Medicaid MAGI-based income standard                   receive advance payments of the
                                                   same Exchange as the primary taxpayer,                  defined in § 155.300.                                 premium tax credit on behalf of him or
                                                   including but not limited to students                      Specifically, we propose that the                  herself, for his or her spouse, or for one
                                                   attending out-of-State schools or tax                   Exchange determine an applicant                       or more of his or her tax dependents.
                                                   dependents who do not live with their                   eligible for Medicaid if he or she: (1)               We clarify that while these standards
                                                   primary taxpayer.                                       Meets the citizenship and immigration                 are described in terms of a primary
                                                      We note that section 1334 of the                     requirements described in 42 CFR                      taxpayer, because the primary taxpayer
                                                   Affordable Care Act directs the Office of               435.406 and 1903(v)(4) of the Social                  actually receives the premium tax credit
                                                   Personnel Management to contract with                   Security Act, as certified by the State               on his or her tax return for the benefit
                                                   health insurance issuers to offer at least              Medicaid agency under 435.1200(c)(3);                 year, an individual who is not a primary
                                                   two private multi-State plans in each                   (2) meets the proposed requirements                   taxpayer may apply for coverage
                                                   Exchange, which we believe may create                   described in 42 CFR 435.403 regarding                 without the presence of a primary
                                                   opportunities for households with                       residency; (3) has a household income,                taxpayer throughout the application
                                                   members in multiple States to remain                    as defined in proposed 42 CFR                         process. The primary taxpayer’s
                                                   covered by the same QHP. We also                        435.911(b), that is at or below the                   involvement is necessary only at the
                                                   solicit comment as to whether there are                 applicable Medicaid MAGI-based                        point at which the Exchange will
                                                   any standards regarding in-network                      income standard; and (4) falls into one               authorize an advance payment, which is
                                                   adequacy for out-of-State dependents                    of the categories described in the                    discussed in § 155.310(d)(2)(ii).
                                                   we should consider.2 We also note that                  definition of ‘‘applicable Medicaid                     We propose that the Exchange
                                                   the preamble to 42 CFR 435.403,                         MAGI-based income standard’’ in                       determine a primary taxpayer eligible to
                                                   proposed in the Medicaid proposed                       § 155.300(a). We note that 42 CFR                     receive advance payments if the
                                                   rule, clarifies that HHS intends to allow               435.406(a), 435.403, and 435.911(b) are               Exchange determines that he or she is
                                                   State Medicaid agencies to continue to                  proposed in the Medicaid proposed rule                expected to have a household income,
                                                   have State-specific rules with respect to               and we intend to fully align the                      as defined in proposed 26 CFR 1.36B–
                                                   residency for students under the                        standards to which the Exchange will                  1(e), of at least 100 percent but not more
                                                   Medicaid program, which is not                          adhere for purposes of Medicaid                       than 400 percent of the FPL, as specified
                                                   consistent with our approach for the                    eligibility with those standards as                   in proposed 26 CFR 1.36B–2(b)(1), for
                                                   Exchange. We recognize that under the                   implemented in the State Medicaid                     the benefit year for which coverage is
                                                   Medicaid proposed rule, State Medicaid                  plan.                                                 requested, and one or more applicants
                                                   agencies will continue to have                             In paragraph (d), we propose that the              for whom the primary taxpayer expects
                                                   flexibility with regard to residency for                Exchange determine an applicant                       to claim a personal exemption
                                                   students and we solicit comments on                     eligible for CHIP if he or she meets the              deduction on his or her tax return for
                                                   whether different rules should be                       requirements of 42 CFR 457.310 through                the benefit year, including the primary
                                                   maintained or whether a unified                         457.320 and has a household income                    taxpayer and his or her spouse (1) meets
                                                   approach should be adopted.                             within the applicable CHIP MAGI-based                 the standards for eligibility for
                                                      In paragraph (b), we propose that the                income standard.                                      enrollment in a QHP through the
                                                   Exchange determine an applicant                            Section 1331 of the Affordable Care                Exchange; and (2) is not eligible for
                                                   eligible for an enrollment period if he or              Act provides a State with the option to               minimum essential coverage, in
                                                   she meets the criteria for an enrollment                create a Basic Health Program to provide              accordance with proposed 26 CFR
                                                   period, as specified in § 155.410 and                   coverage to some qualified individuals                1.36B–2(a)(2) (which excludes coverage
                                                   § 155.420 of this part. The purpose of                  in lieu of Exchange coverage. In                      purchased through the individual
                                                   this provision is to clarify that in                    paragraph (e), we propose to codify that              market, as well as employer-sponsored
                                                   addition to determining whether an                      if a Basic Health Program is operating in             minimum essential coverage for which
                                                   applicant meets the eligibility standards               the service area of the Exchange, the                 the employee’s contribution exceeds 9.5
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                                                   for enrollment in a QHP specified in                    Exchange will determine an individual’s               percent (in 2014, and indexed in future
                                                   paragraph (a) of this section, the                      eligibility for the Basic Health Program.             years) of household income or for which
                                                   Exchange will determine whether or not                  We intend to address policies for the                 the plan’s share of the total allowed
                                                   the applicant is permitted to enroll in a               Basic Health Program in future                        costs of benefits provided under the
                                                   QHP at the time the applicant actually                  rulemaking.                                           plan is less than 60 percent of such
                                                   seeks coverage.                                            Sections 1401, which creates a new                 costs, unless an individual is enrolled in
                                                                                                           section 36B of the Code, and 1402 of the              such employer-sponsored minimum
                                                     2 Network adequacy is addressed in the Exchange       Affordable Care Act establish a                       essential coverage). We clarify that the
                                                   proposed rule at 76 FR 41866, 41893–94.                 premium tax credit and cost-sharing                   definition of household income in 26


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                                                   51208                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   CFR 1.36B–1(e) of the Treasury                             In paragraph (f)(5), we propose that in               We highlight two key differences
                                                   proposed rule does not include the                      the event the Exchange determines that                between Medicaid and CHIP and
                                                   income of an individual in a primary                    a primary taxpayer is eligible to receive             advance payments of the premium tax
                                                   taxpayer’s family who is not required to                advance payments of the premium tax                   credit. First, while eligibility for
                                                   file.                                                   credit, the Exchange will calculate                   Medicaid and CHIP is based on current
                                                      In addition, in paragraph (f)(2), we                 advance payments of the premium tax                   income, eligibility for advance
                                                   propose that the Exchange determine a                   credit in accordance with 26 CFR                      payments of the premium tax credit is
                                                   primary taxpayer eligible for advance                   1.36B–3 of the Treasury proposed rule.                based on annual income. Second, unlike
                                                   payments of the premium tax credit if                   Our proposal to adopt the IRS premium                 Medicaid and CHIP, the premium tax
                                                   the Exchange determines that (1) he or                  tax credit rules for advance payments                 credit is paid on an advance basis and
                                                   she meets the standards specified in                    ensures that, to the extent the                       then reconciled based on information
                                                   paragraph (f)(1) (regarding eligibility for             information used to calculate a primary               reported on an individual’s tax return
                                                   advance payments of the premium tax                     taxpayer’s advance payments is                        for the entire year. That is, to the extent
                                                   credit) except for paragraph (f)(1)(i)                  consistent with the information                       that an individual receives advance
                                                   (household income of at least 100                       reporting on the primary taxpayer’s                   payments of the premium tax credit
                                                   percent but not more than 400 percent                   income tax return at the end of the                   based on an initial eligibility
                                                   of the FPL); (2) he or she is expected to               taxable year, the advance payment                     determination at 150 percent of the FPL
                                                   have a household income of less than                    calculation will be consistent with the               and his or her actual annual household
                                                   100 percent of the FPL; and (3) one or                  ultimate premium tax credit calculation,              income as reported on his or her tax
                                                   more applicants, including the primary                  reducing the potential for differences at             return is 300 percent of the FPL, he or
                                                   taxpayer and his or her spouse, for                     the time of reconciliation. We also note              she will be liable to repay advance
                                                   whom the primary taxpayer expects to                    that in § 155.310(d)(2), we propose the               payments of the premium tax credit to
                                                   claim a personal exemption deduction                    Exchange permit a primary taxpayer to                 reduce the credit to the 300 percent
                                                   on his or her tax return for the benefit                accept less than the full amount of                   level, subject to the statutory caps on
                                                   year, including the primary taxpayer                    advance payments of the premium tax                   repayment proposed in 26 CFR 1.36B–
                                                   and his or her spouse, is a non-citizen                 credit for which he or she is determined              4 of the Treasury proposed rule.
                                                   who is lawfully present and ineligible                  eligible.                                                Commenters to the RFC raised
                                                   for Medicaid by reason of immigration                                                                         concerns regarding the potential for the
                                                                                                              Lastly, in paragraph (f)(6), we propose            statutory reconciliation process, in
                                                   status.                                                 that the Exchange must require an                     combination with the annual basis of
                                                      In paragraph (f)(3), we propose that                 application filer to provide the Social               household income for advance
                                                   the Exchange may provide advance                        Security number (SSN) of the primary                  payments of the premium tax credit, to
                                                   payments of the premium tax credit                      taxpayer if an application filer attests              render coverage unaffordable for
                                                   only for an applicant who is enrolled in                that the primary taxpayer has a SSN and               individuals who have substantial
                                                   a QHP through the Exchange. The intent                  filed a tax return for the year for which             decreases in income during the benefit
                                                   of this provision is to clarify that an                 tax data would be utilized for                        year. A related concern is that the fear
                                                   applicant does not need to be enrolled                  verification of household income and                  of large repayments due to
                                                   in a QHP to be determined eligible for                  family size. Sections 1412(b)(1) and                  reconciliation after an increase in
                                                   advance payments of the premium tax                     1411(b)(3) of the Affordable Care Act                 income could deter enrollment. Both
                                                   credit; however, an applicant must be                   together provide that eligibility                     effects could result in a lower
                                                   enrolled prior to advance payments                      determinations for advance payments of                participation and a negative impact on
                                                   being made to a QHP issuer.                             the premium tax credit are to be made                 the Exchange risk pool. To address these
                                                      In paragraph (f)(4), we propose that                 based on tax return data, to the extent               concerns, the Exchange can decrease the
                                                   the Exchange determine a primary                        that reasonably recent and                            difference between the amount of
                                                   taxpayer ineligible to receive advance                  representative tax return data is                     advance payments and the premium tax
                                                   payments of the premium tax credit if                   available; the Secretary of the Treasury              credit amount based on actual income at
                                                   HHS notifies the Exchange that the                      is only able to provide tax data for                  the end of the year through a strong
                                                   primary taxpayer or his or her spouse                   primary taxpayers for whom the                        initial eligibility process that maximizes
                                                   received advance payments for a prior                   Exchange provides a SSN or an                         accuracy and a strong process by which
                                                   year for which tax data would be                        adoption taxpayer identification number               individuals can report changes that
                                                   utilized for income verification and did                (ATIN). We clarify that taxpayers who                 occur during the year. We solicit
                                                   not comply with the requirement to file                 have SSNs and who have tax data                       comments on ways of achieving this
                                                   a tax return for such year, as proposed                 available that would be used for                      outcome.
                                                   in 26 CFR 1.6011–8. For example, this                   verification of household income and                     In paragraph (g), we propose that the
                                                   requirement means that for open                         family size must provide them to the                  Exchange determine an applicant
                                                   enrollment for coverage in calendar year                Exchange for purposes of eligibility for              eligible for cost-sharing reductions if he
                                                   2016, which will take place in the fall                 advance payments of the premium tax                   or she meets eligibility standards that
                                                   of 2015, a primary taxpayer on whose                    credit. We note that, because the                     we propose to codify from section 1402
                                                   behalf advance payments were made for                   eligibility standards for cost-sharing                of the Affordable Care Act. In
                                                   calendar year 2014 must have filed a tax                reductions proposed at § 155.305(g)                   accordance with sections 1402(b) and
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                                                   return for 2014. This proposal is                       incorporate the eligibility standards for             (c) of the Affordable Care Act, in
                                                   intended to prevent a primary taxpayer                  advance payments of the premium tax                   paragraph (g)(1) of this section, we
                                                   or spouse who has failed to comply with                 credit, this standard also applies for the            propose that the Exchange must
                                                   tax filing rules from accumulating                      purposes of eligibility for cost-sharing              determine an applicant eligible for cost-
                                                   additional Federal tax liabilities due to               reductions. Like all other data                       sharing reductions if he or she is (i)
                                                   advance payments of the premium tax                     collections, the use and disclosure of                eligible for enrollment in a QHP in
                                                   credit. An individual may remove this                   SSNs is subject to the privacy and                    accordance with paragraph (a) of this
                                                   restriction by filing a tax return for the              security safeguards proposed in                       section; (ii) is eligible for advance
                                                   year in question.                                       § 155.260 and § 155.270.                              payments of the premium tax credit in


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                           51209

                                                   accordance with paragraph (f) of this                   whole and in part on whether an                          In paragraph (c), we propose that the
                                                   section; and (iii) has household income                 individual is an Indian are described in              Exchange accept an application and
                                                   for the taxable year that does not exceed               § 155.350 of this subpart.                            make an eligibility determination for an
                                                   250 percent of the FPL. We note that                                                                          applicant seeking an eligibility
                                                                                                           c. Eligibility Determination Process
                                                   there are also special eligibility                                                                            determination at any point in time
                                                                                                           (§ 155.310)
                                                   standards for cost-sharing reductions                                                                         during a benefit year. An eligibility
                                                   based on Indian status, which are                          In § 155.310, consistent with sections             determination is a necessary precursor
                                                   described in § 155.350 of this subpart.                 1411–1413 of the Affordable Care Act,                 to enrollment; after an applicant is
                                                      Section 1402(b) of the Affordable Care               we propose the process by which the                   determined eligible for enrollment in a
                                                   Act explicitly provides that an                         Exchange will determine an individual’s               QHP, he or she may select a QHP and
                                                   individual is eligible for reduced cost-                eligibility for enrollment in a QHP and               will then be able to receive covered
                                                   sharing if his or her household income                  for insurance affordability programs.                 health care services. We clarify that this
                                                   exceeds 100 percent of the FPL, but                        In paragraph (a)(1), we propose that               does not supersede the limited
                                                   does not exceed 400 percent of the FPL.                 the Exchange accept applications from                 enrollment periods in 45 CFR subpart E.
                                                   However, section 1402(c)(1)(B)(i)(IV)                   individuals in the form and manner                    In addition, subpart E does not limit an
                                                   specifies that cost-sharing reductions for              described in proposed 45 CFR                          applicant’s ability to request and receive
                                                   an individual with household income                     § 155.405, published in the Exchange                  an eligibility determination, including
                                                   that exceeds 250 percent of the FPL but                 proposed rule at 76 FR 41866.                         an eligibility determination for advance
                                                   does not exceed 400 percent of the FPL                  Furthermore, in paragraph (a)(2), we                  payments of the premium tax credit or
                                                   may not result in the QHP’s share of                    propose to prohibit the Exchange from                 cost-sharing reductions, if he or she has
                                                   costs exceeding 70 percent, which is the                requiring an individual who is not                    previously declined such a
                                                   actuarial value standard for a silver-                  seeking coverage for himself or herself               determination. We also note that
                                                   level QHP pursuant to section                           (a ‘non-applicant’), including an                     § 155.330 directs the Exchange to accept
                                                   1302(d)(1)(B) of the Affordable Care Act,               individual who is applying for coverage               and process changes reported by
                                                   regardless of cost-sharing reductions.                  on behalf of another party, to provide                enrollees during the benefit year as well.
                                                   Since an individual has to enroll in a                  information regarding the non-                           In paragraph (d)(1), we propose that
                                                   silver-level QHP in order to receive cost-              applicant’s citizenship, status as a                  after the Exchange has collected and
                                                   sharing reductions, and the actuarial                   national, or immigration status on any                verified all necessary data, the Exchange
                                                   value of a silver-level QHP without cost-               application or supplemental form. We                  conduct an eligibility determination in
                                                   sharing reductions is 70 percent, an                    also propose that the Exchange may not                accordance with the standards
                                                   individual with household income that                   require such an individual to provide a               described in § 155.305 of this part.
                                                   exceeds 250 percent of the FPL who is                   SSN, except as specified in                              In paragraph (d)(2)(i), we propose that
                                                   not an Indian is not eligible for cost-                 § 155.305(f)(6), which addresses, for the             the Exchange allow an applicant who is
                                                   sharing reductions, which is reflected in               purposes of eligibility for advance                   determined eligible for advance
                                                   paragraph (g)(1)(iii).                                  payments of the premium tax credit,                   payments of the premium tax credit to
                                                      Lastly, in paragraph (g)(2), we propose              primary taxpayers who have SSNs and                   accept less than the expected annual
                                                   to codify section 1402(b)(1) of the                     have tax data on file with the IRS that               amount of advance payments
                                                   Affordable Care Act, which specifies                    would be used in the verification of                  authorized. This proposal is designed to
                                                   that an applicant must be enrolled in a                 household income and family size. This                reduce the enrollee’s risk of repayment
                                                   QHP in the silver level of coverage in                  exception is based on sections                        at the point of reconciliation.
                                                   order to receive cost-sharing reductions.               1412(b)(1) and 1411(b)(3) of the                         In paragraph (d)(2)(ii), we propose to
                                                      In paragraph (h), we propose three                   Affordable Care Act and is discussed                  clarify that the Exchange may provide
                                                   eligibility categories for cost-sharing                 further above.                                        advance payments on behalf of a
                                                   reductions in accordance with                              In paragraph (b), we propose that the              primary taxpayer only if the primary
                                                   paragraph (g) and section 1402 of the                   Exchange permit an individual to                      taxpayer first attests that he or she will
                                                   Affordable Care Act. In § 155.340, we                   decline an eligibility determination for              meet the tax-related provisions
                                                   propose that the Exchange transmit                      insurance affordability programs. This                discussed in the definition of primary
                                                   information about an enrollee’s category                proposal is designed to ensure that an                taxpayer, including that he or she will
                                                   to his or her QHP issuer in order to                    individual can bypass the additional                  claim a personal exemption deduction
                                                   enable the QHP issuer to provide the                    steps required for such screening and                 on his or her tax return for the
                                                   correct level of reductions. The                        proceed directly to selecting and                     applicants identified as members of his
                                                   proposed categories are as follows: In                  enrolling in a QHP. We clarify that this              or her tax family. In a scenario in which
                                                   paragraph (h)(1), an individual who has                 proposal does not allow an applicant to               more than one tax household is covered
                                                   household income greater than 100                       choose to seek a determination only for               through a single policy, 26 CFR 1.36B–
                                                   percent of the FPL and less than or                     advance payments of the premium tax                   3 of the Treasury proposed rule
                                                   equal to 150 percent of the FPL; in                     credit and cost-sharing reductions (and               proposes that advance payments will be
                                                   paragraph (h)(2), an individual who has                 not for Medicaid and CHIP) or vice                    split between the two primary
                                                   household income greater than 150                       versa. Section 36B(c)(2)(B) of the Code               taxpayers; that is, a primary taxpayer
                                                   percent of the FPL and less than or                     states that an applicant is ineligible for            may not receive advance payments for
                                                   equal to 200 percent of the FPL; and in                 advance payments of the premium tax                   which another primary taxpayer is
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   paragraph (h)(3), an individual who has                 credit to the extent that he or she is                eligible. This proposal also clarifies that
                                                   household income greater than 200                       eligible for other minimum essential                  while an application filer who is not the
                                                   percent of the FPL and less than or                     coverage, which includes Medicaid and                 primary taxpayer may complete the
                                                   equal to 250 percent of the FPL.                        CHIP. This provision means that the                   application process on the primary
                                                   Additional information regarding the                    Exchange will consider an applicant’s                 taxpayer’s behalf, the primary taxpayer
                                                   implementation of cost-sharing                          eligibility for Medicaid and CHIP as part             must actively attest that he or she will
                                                   reductions will be provided in the                      of an eligibility determination for                   comply with the standards for advance
                                                   future. Eligibility standards for cost-                 advance payments of the premium tax                   payments that are related to tax filing
                                                   sharing provisions that are based in                    credit.                                               prior to advance payments being made


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                                                   51210                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   for his or her family. This is designed                 proficient individuals and ensure                     with the process for an individual who
                                                   to ensure that the primary taxpayer                     effective communication for people                    has been determined eligible for
                                                   appreciates and accepts the tax                         with disabilities. We anticipate                      enrollment in a QHP and who actually
                                                   consequences that follow from receipt of                proposing additional information to be                enrolls during an authorized enrollment
                                                   advance payments.                                       included in notices in future                         period, and to minimize burden on
                                                      In paragraph (d)(3), we propose that if              rulemaking.                                           applicants and the Exchange. We solicit
                                                   the Exchange determines an applicant is                    In paragraph (g), we propose to codify             comments on this approach, and
                                                   eligible for Medicaid or CHIP, the                      the reporting rules in section                        whether the application process should
                                                   Exchange will notify the State Medicaid                 1411(e)(4)(B)(iii) of the Affordable Care             begin anew in some or all of these
                                                   or CHIP agency and transmit relevant                    Act, which support the employer                       situations.
                                                   information, including information from                 responsibility provisions of the
                                                   the application and the results of                      Affordable Care Act. We propose that                  d. Verification Process Related to
                                                   verifications, to such agency promptly                  when the Exchange determines an                       Eligibility for Enrollment in a QHP
                                                   and without undue delay in order to                     applicant is eligible to receive advance              (§ 155.315)
                                                   enable the applicant to receive benefits.               payments of the premium tax credit or                    Sections 1411(c) and (d) of the
                                                      In paragraph (e), we clarify that upon               cost-sharing reductions based in part on              Affordable Care Act require the
                                                   making eligibility determinations for                   a finding that his or her employer does               verification of applicant information
                                                   enrollment in a QHP, advance payments                   not provide minimum essential                         prior to using such information to
                                                   of the premium tax credit, and cost-                    coverage, or provides coverage that is                determine eligibility. The statute is
                                                   sharing reductions, the Exchange will                   not affordable, as specified in section               specific with regard to the verification
                                                   implement the eligibility determinations                36B(c)(2)(C)(i) of the Code, or does not              process for some, but not all,
                                                   in accordance with the coverage                         meet the minimum value standard as                    information needed to determine
                                                   effective dates specified in subpart E,                 specified in section 36B(c)(2)(C)(ii) of              eligibility. Section 1411(d) of the
                                                   which are found at 45 CFR 155.410(c)                    the Code, the Exchange will notify the                Affordable Care Act provides authority
                                                   and (f), and 45 CFR 155.420(b). This is                 employer and identify the employee.                   for the Secretary to establish verification
                                                   designed to ensure that an applicant’s                  We anticipate providing additional                    procedures for certain categories of
                                                   entire eligibility determination and any                information on the content of this notice             information described in section 1411
                                                   financial assistance to support the                     in future rulemaking.                                 without a specific process established
                                                   purchase of coverage are effective                         In paragraph (h), we propose rules                 by the statute. In addition, section
                                                   simultaneously.                                         regarding the duration of an eligibility              1411(c)(4)(B) of the Affordable Care Act
                                                      After the Exchange determines                        determination for an applicant who is                 provides authority to the Secretary to
                                                   eligibility, in paragraph (f) we propose                determined eligible for enrollment in a               modify the statutory verification
                                                   that the Exchange provide an applicant                  QHP but does not select a QHP within                  methods in certain cases.
                                                   with a timely, written notice of his or                 his or her enrollment period in                          We propose to split the verification
                                                   her eligibility determination. For an                   accordance with subpart E of this part.               process of the Exchange into two main
                                                   applicant who requests an eligibility                   The purpose of these proposed rules is                sections within this subpart: § 155.315,
                                                   determination for insurance                             to ensure that the information used to                which contains the verification process
                                                   affordability programs, the Exchange                    support an eligibility determination                  related to eligibility for enrollment in a
                                                   will provide information in the notice                  remains accurate, while limiting burden               QHP, and § 155.320, which contains the
                                                   regarding the applicant’s eligibility for               and creating consistency with the rules               verification process related to insurance
                                                   all such programs. While we expect that                 for the population that selects a QHP.                affordability programs. We also note
                                                   the Exchange will provide an applicant                  First, in paragraph (h)(1), we propose                that § 155.350 contains a process for
                                                   who is applying online with                             that to the extent that such an                       verification of whether an applicant is
                                                   information regarding his or her                        individual seeks a new enrollment                     an Indian.
                                                   eligibility determination as the process                period prior to the date on which he or                  In general, the verification processes
                                                   progresses, we clarify that the Exchange                she would have been subject to an                     proposed in this subpart would have the
                                                   must provide a single written notice to                 annual redetermination in accordance                  Exchange first rely on sources of
                                                   each applicant when the eligibility                     with § 155.335, the Exchange must                     electronic data and, to the extent that
                                                   determination is final. The written                     receive an attestation from him or her as             the Exchange is unable to verify
                                                   notice of eligibility is intended to                    to whether information affecting his or               information through such sources,
                                                   provide an individual with a record of                  her eligibility has changed prior to                  follow specific procedures that include
                                                   the steps taken and remaining actions                   accepting such selection. Second, in                  requesting documentation from
                                                   needed to complete the eligibility and                  paragraph (h)(2), we propose that to the              applicants. Data sources described in
                                                   enrollment process, as well as                          extent than an applicant who is                       this section may include the records of
                                                   information regarding his or her right to               determined eligible for enrollment in a               the Social Security Administration
                                                   appeal. We note that written notice is                  QHP does not select a QHP within his                  (SSA), the Department of Homeland
                                                   not necessary at every step of the                      or her enrollment period, and seeks a                 Security (DHS), and the Internal
                                                   eligibility process; rather, the Exchange               new enrollment period on or after the                 Revenue Service (IRS), as well as data
                                                   will provide a single notice at the                     date on which he or she would have                    sources maintained by other entities.
                                                   conclusion of the determination, as well                been subject to an annual                                We also note that we propose to
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   as notices when additional information                  redetermination, the Exchange will                    include authority for the Exchange to
                                                   is required. We note that in § 155.230,                 conduct an annual redetermination in                  request documentation from an
                                                   we proposed general rules regarding                     accordance with § 155.335 prior to                    applicant when information provided
                                                   notices under this part, which include                  determining the applicant’s eligibility               by the applicant is not reasonably
                                                   provisions regarding ensuring that                      for an enrollment period.                             compatible with other information
                                                   notices be written in plain language and                   We considered requiring a new                      provided for an applicant or in the
                                                   in a manner that meets the needs of                     determination after a specific period of              records of the Exchange for the
                                                   diverse populations by providing                        time, but opted for the proposed                      applicant; this proposal is designed to
                                                   meaningful access to limited English                    language in order to create consistency               enhance program integrity while


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                           51211

                                                   limiting additional requests to only                    citizenship. If SSA is unable to match                Secretary related to how often eligibility
                                                   those situations in which there is good                 the individual’s basic identifying                    is provided to applicants who are
                                                   cause for such requests. The preamble                   information to an SSA record, HHS will                ultimately determined ineligible, when
                                                   discussion associated with proposed                     notify the Exchange regarding the                     a State is not using the option to
                                                   42 CFR 435.952(b) of the Medicaid                       inconsistency.                                        communicate with SSA on a real-time
                                                   proposed rule addresses the ‘‘reasonably                   In paragraph (b)(2), and consistent                basis. We intend for the process
                                                   compatible’’ standard, which is used                    with section 1411(c)(2)(B) of the                     proposed under this section to be near
                                                   throughout the Medicaid proposed rule                   Affordable Care Act, we propose that for              real-time, and therefore, we believe that
                                                   as well. We intend to interpret this                    an applicant who has documentation                    this calculation does not apply to the
                                                   standard the same way here (in the                      that can be verified through the                      Exchange. Further, unlike the choice
                                                   context of the Exchange) as it is                       Department of Homeland Security                       provided to a State Medicaid agency
                                                   interpreted and applied in the context of               (DHS) and who attests to lawful                       pursuant to section 1902 of the Act, the
                                                   Medicaid and CHIP.                                      presence, or who attests to citizenship               Exchange will not automatically have
                                                      In paragraph (a), we propose that the                and for whom the Exchange cannot                      the ability to implement a different
                                                   Exchange verify or obtain information to                substantiate citizenship through SSA,                 verification process; therefore, the use of
                                                   determine that an applicant is eligible                 including an applicant who does not                   a penalty provision appears
                                                   for enrollment in a QHP as provided in                  attest to citizenship or does not have a              inappropriate here.
                                                   this section, unless an Exchange’s                      Social Security number, the Exchange                     This inconsistency process is
                                                   request for modification of the methods                 will transmit information from the                    substantially similar to the
                                                   used for collection and verification of                 applicant’s documentation and basic                   inconsistency process for information
                                                   information is granted pursuant to                      identifying information to HHS, which                 not related to citizenship, status as a
                                                   paragraph (e). Under paragraph (e),                     will submit a request to DHS and return               national, or lawful presence, which is
                                                   described later, we propose the                         the response to the Exchange. Several                 described in section 1411(e)(4) of the
                                                   flexibility to develop alternative                      commenters to the RFC recommended                     Affordable Care Act, codified in
                                                   verification processes that achieve the                 that we utilize the DHS Systematic                    paragraph (e) of this section, and
                                                   same goals as those proposed for general                Alien Verification for Entitlements                   discussed below. As such, in paragraph
                                                   use.                                                    (SAVE) system to satisfy this standard.               (b)(3), we specify that in the case of an
                                                      In paragraph (b), we propose the                     The proposed language supports the use                inconsistency related to citizenship,
                                                   process that the Exchange follows to                    of SAVE, and we are working closely                   status as a national, or lawful presence,
                                                   ensure that an individual is a citizen,                 with DHS to identify the best                         the Exchange will follow the procedures
                                                   national, or otherwise lawfully present                 technological option available to                     specified in paragraph (e), except that
                                                   individual in accordance with sections                  maximize accuracy and minimize delay.                 the time period for the resolution of
                                                   1312(f)(3) and 1411(c) of the Affordable                   Section 1411(e)(3) of the Affordable               inconsistencies related to citizenship,
                                                   Care Act, respectively. This is the first               Care Act specifies that in a situation in             status as a national, or lawful presence
                                                   of several proposals regarding                          which the Exchange is unable to verify                is 90 days from the date on which the
                                                   verification with the records of Federal                an applicant’s claim of citizenship,                  notice of inconsistency is received,
                                                   officials. For such verifications, we                   status as a national, or lawful presence              rather that the date on which it is sent,
                                                   propose to codify the role of the                       through either SSA or DHS, the                        as required by the law. We clarify that
                                                   Secretary (through HHS) as an                           applicant’s eligibility must be                       the date on which the notice is received
                                                   intermediary between the Exchange and                   determined in the same manner as an                   means 5 days after the date on the
                                                   other Federal officials, as described in                applicant’s eligibility under the                     notice, unless the applicant shows that
                                                   section 1411(c). This proposal is                       Medicaid program under section                        he or she did not receive the notice
                                                   designed to simplify the process for the                1902(ee) of the Act. Section 1902(ee) of              within the 5-day period. This 5-day
                                                   Exchange as well as for involved                        the Act includes a number of provisions               period is the standard period used by
                                                   Federal agencies.                                       related to the verification of citizenship,           SSA for the Supplemental Security
                                                      In paragraph (b)(1), we propose that                 including a process by which a                        Income (Title XVI) and Old Age and
                                                   for an applicant who attests to                         Medicaid agency can request that SSA                  Disability (Title II) programs to account
                                                   citizenship and has a Social Security                   verify whether an applicant’s attestation             for mailing a notice and receipt by the
                                                   number, the Exchange will transmit the                  of citizenship matches SSA’s records. If              individual, and we believe this
                                                   applicant’s Social Security number and                  such substantiation is unsuccessful,                  reasonable standard to adopt for the
                                                   other identifying information needed by                 section 1902(ee) of the Act directs the               inconsistency process. We note that this
                                                   the Social Security Administration                      Medicaid agency to: (1) Make a                        process covers situations in which an
                                                   (SSA) to SSA via HHS to verify whether                  reasonable effort to identify and address             applicant has neither a Social Security
                                                   the information matches SSA’s records.                  the causes of the inconsistency; (2)                  number nor documentation that can be
                                                   We anticipate that SSA may revise its                   notify the applicant of the inconsistency             verified with DHS. Future rulemaking
                                                   information requirements and that a                     if the inconsistency cannot be resolved               will address the standards that the
                                                   level of flexibility will be necessary to               through this step, provide the applicant              Exchange will use to adjudicate
                                                   efficiently use this process. If the                    with a period of 90 days from receipt of              documentary evidence of citizenship
                                                   information needed to perform this                      the notice to present satisfactory                    provided by an applicant within this
                                                   verification with SSA changes, HHS                      documentation of citizenship or resolve               inconsistency process.
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   will issue guidance to Exchanges. We                    the inconsistency with SSA, and                          In paragraph (c), we propose the
                                                   anticipate that the single, streamlined                 provide Medicaid coverage during this                 verification process to be used by the
                                                   application proposed in 45 CFR                          period; and (3) if the inconsistency is               Exchange to ensure that an individual
                                                   § 155.405 will contain the necessary                    not resolved after the close of the                   meets the residency standard specified
                                                   information. If SSA can match the                       period, disenroll the individual. Section             in § 155.305(a)(3) of this part. This
                                                   individual’s basic identifying                          1902(ee) of the Act also includes details             process is parallel to that proposed for
                                                   information to an SSA record, HHS will                  of the relationship between a State                   Medicaid.
                                                   notify the Exchange as to whether SSA                   Medicaid agency and SSA, as well as                      In paragraph (c)(1), to verify
                                                   can substantiate the applicant’s                        the calculation of a payment to the                   residency, we propose that the


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                                                   51212                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   Exchange accept an applicant’s                          this allows for the possibility that no               which covers other inconsistencies. The
                                                   attestation as to residency without                     electronic data source will be                        process described in this paragraph is
                                                   further verification unless, as described               authorized. In paragraph (d)(2), we                   the process under section 1411(e)(4) of
                                                   in paragraph (c)(2), the State Medicaid                 propose that to the extent that approved              the Affordable Care Act; as noted above,
                                                   or CHIP agency operating in the State in                electronic data sources are unavailable,              paragraph (b)(3) of this section details
                                                   which the Exchange operates chooses                     the Exchange accept the applicant’s                   the modifications required to the
                                                   not to allow verification of residency                  attestation without further verification,             procedures described in this section to
                                                   based solely on attestation, in which                   except as provided in paragraph (d)(3).               accommodate the process for
                                                   case the Exchange will verify residency                 In paragraph (d)(3), we propose that in               inconsistencies related to citizenship,
                                                   in accordance with 42 CFR 435.956(c)                    the event that an applicant’s attestation             status as a national, and lawful
                                                   and 42 CFR 457.380(c), which are                        is not reasonably compatible with                     presence.
                                                   proposed in the Medicaid proposed                       information from the data sources                        First, under paragraph (e)(1), the
                                                   rule.                                                   specified in paragraph (d)(1) or with                 Exchange will make a reasonable effort
                                                      Furthermore, in paragraph (c)(3), we                 other information provided by the                     to identify and resolve the issues.
                                                   propose that the Exchange may examine                   applicant or in the records of the                    Second, in paragraph (e)(2)(i), if the
                                                   data sources regarding residency to the                 Exchange, the Exchange follow the                     Exchange is unable to resolve the
                                                   extent that information provided for an                 inconsistency procedures described in                 inconsistencies, the Exchange will
                                                   applicant regarding residency is not                    § 155.315(e) of this section, in                      notify the applicant of the
                                                   reasonably compatible with other                        accordance with section                               inconsistency. After providing this
                                                   information provided for the applicant                  1411(e)(4)(A)(ii)(II) of the Affordable               notice, in paragraph (e)(2)(ii), the
                                                   or in the records of the Exchange.                      Care Act.                                             Exchange will provide 90 days from the
                                                   Examples of such data sources include                      We solicit comment as to what                      date on which the notice is sent for the
                                                   State tax returns, Supplemental                         electronic data sources are available and             applicant to resolve the issues, either
                                                   Nutrition Assistance Program or                         should be authorized by HHS for                       with the Exchange or with the agency or
                                                   Temporary Assistance for Needy                          Exchange purposes, including whether                  office that maintains the data source
                                                   Families eligibility information, motor                 access to such data sources should be                 that is inconsistent with the attestation.
                                                   vehicles administration information, or                 provided as a Federally-managed                          In paragraph (e)(3), we propose that
                                                   other local, State or Federal sources of                service like citizenship and immigration              the period during which an applicant
                                                   information.                                            status information from SSA and DHS.                  may resolve the inconsistency may be
                                                      In paragraph (c)(4), we propose that to              We also note that the proposal regarding              extended by the Exchange if the
                                                   the extent information in the data                      documentation is designed only to                     applicant can provide evidence that a
                                                   sources examined by the Exchange in                     account for situations in which an                    good faith effort has been made to
                                                   accordance with paragraph (c)(3) of this                attestation is not reasonably compatible              obtain additional documentation. We
                                                   section is not reasonably compatible                    with information contained in approved                are adopting this provision in order to
                                                   with information provided for the                       electronic data sources.                              align with current Medicaid policy
                                                   applicant, the Exchange will request                       In paragraph (e), we propose to codify             which offers States the flexibility to
                                                   additional documentation in accordance                  sections 1411(e)(3) and 1411(e)(4) of the             allow for a good faith extension for
                                                   with § 155.315(e) of this section. We                   Affordable Care Act to address                        individuals to provide documentary
                                                   also propose that a document that                       situations in which an applicant attests              evidence of citizenship or immigration
                                                   provides evidence of immigration status                 to information needed to determine                    status.
                                                   may not be used alone to determine                      eligibility, and such attestation is                     In paragraph (e)(4), we propose to
                                                   State residency. As discussed in the                    inconsistent with other information in                codify the provision of sections
                                                   preamble to proposed 42 CFR 435.956(c)                  the records of the Exchange, including                1411(e)(3) and 1411(e)(4) of the
                                                   of the Medicaid proposed rule, this                     information maintained in the records                 Affordable Care Act that the Exchange
                                                   provision is intended to ensure that                    of applicable Federal officials. As such,             must allow an individual who is
                                                   while documents which provide                           we cross-reference this paragraph for a               otherwise eligible for enrollment in a
                                                   information regarding immigration                       number of verifications within § 155.315              QHP, advance payments of the premium
                                                   status should be used as a source of                    and § 155.320 of this subpart. Such                   tax credit or cost-sharing reductions to
                                                   evidence to verify satisfactory                         sections may also have specific                       receive such coverage and financial
                                                   immigration status, they may not, by                    standards for the adjudication of                     assistance during the resolution period.
                                                   themselves, be used to demonstrate a                    relevant documentation by the                         However, in paragraph (e)(4)(ii), we
                                                   lack of residency.                                      Exchange that are tailored to specific                clarify that the Exchange will ensure
                                                      In paragraph (d), we propose that the                inconsistencies. We also note that given              that the primary taxpayer attests to the
                                                   Exchange verify an applicant’s                          that the process in this paragraph is                 Exchange that he or she understands
                                                   attestation that he or she is not                       applied to more than one piece of                     that any advance payments of the
                                                   incarcerated, with the exception of                     information, it is possible for an                    premium tax credit received during the
                                                   incarceration pending the disposition of                applicant to have multiple                            resolution period are subject to
                                                   charges. In paragraph (d)(1), we propose                inconsistencies simultaneously. In such               reconciliation in order to receive such
                                                   that the Exchange implement this policy                 a situation, the Exchange will continue               advance payments of the premium tax
                                                   by first relying on any electronic data                 to use an applicant’s attestations for any            credit.
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   sources that are available to the                       information that is subject to the                       Lastly, in paragraph (e)(5), we propose
                                                   Exchange and which have been                            inconsistency process in accordance                   that if after the conclusion of the
                                                   authorized by HHS for verification of                   with paragraph (e)(4)(ii) of this section.            resolution period, the Exchange is
                                                   incarceration. HHS will approve                            Section 1411(e)(3) of the Affordable               unable to verify the applicant’s
                                                   electronic data sources based on                        Care Act, which covers inconsistencies                attestation, the Exchange will determine
                                                   evidence showing that such data                         related to citizenship, status as a                   the applicant’s eligibility based on the
                                                   sources are sufficiently accurate and                   national, and lawful presence, is                     information available from the data
                                                   offer less administrative complexity                    substantially similar to section                      sources specified in this subpart, and
                                                   than paper verification; we note that                   1411(e)(4) of the Affordable Care Act,                notify the applicant of such


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                                                   determination in accordance with the                    § 155.270. We solicit comment regarding               propose that the Exchange verify
                                                   notice standards in § 155.310(f) of this                likely proposals from Exchanges that                  whether an individual is eligible for
                                                   subpart, including notice that the                      would meet these criteria.                            minimum essential coverage other than
                                                   Exchange is unable to resolve the                          Section 1411(g)(1) and 1413(b)(2) of               through an eligible employer-sponsored
                                                   inconsistency. We further propose that                  the Affordable Care Act direct the                    plan or Medicaid, CHIP, or the Basic
                                                   the Exchange then implement this                        Secretary to ensure that an applicant be              Health Program within the State in
                                                   eligibility determination no earlier than               asked only to provide the minimum                     which the Exchange operates using
                                                   10 days after and no later than 30 days                 amount of information and paperwork                   information obtained from HHS, which
                                                   after the date on which such notice is                  needed for purposes of making an                      will obtain relevant information from
                                                   sent. We note that we intend to address                 eligibility determination. In paragraph               selected Federal offices. We are
                                                   in the future the timing of notices,                    (g), we propose to codify section                     currently working with other Federal
                                                   including standards related to the time                 1411(g)(1) of the Affordable Care Act by              agencies to determine where relevant
                                                   between a notice of an adverse action                   specifying that the Exchange must not                 records are maintained, and we solicit
                                                   and the effective date of such action,                  require an applicant to provide                       comments about specific data sources
                                                   and we intend to coordinate such                        information beyond what is necessary to               that HHS should integrate in to this
                                                   requirements with Medicaid. We note                     support the eligibility and enrollment                process, as well as data sources that
                                                   that like all other eligibility                         processes of the Exchange, Medicaid,                  should be utilized directly by the
                                                   determinations, an eligibility                          and CHIP, including the process for                   Exchange, keeping in mind the direction
                                                   determination in accordance with                        resolving inconsistencies described in                from section 1413(c) of the Affordable
                                                   paragraph (e)(5)(i) of this section is                  § 155.315(e).                                         Care Act regarding the use of data
                                                   subject to appeal.                                      e. Verification Process Related to                    currently authorized for use in Medicaid
                                                      In addition to the authority proposed                                                                      and CHIP determinations.
                                                                                                           Eligibility for Insurance Affordability
                                                   for the Exchange in paragraph (e)(3),                                                                            In paragraph (b)(2), we propose that
                                                                                                           Programs (§ 155.320)
                                                   section 1411(b)(4)(A)(ii)(II) of the                                                                          the Exchange verify whether an
                                                   Affordable Care Act also provides HHS                      In § 155.320, we outline the                       applicant has already been determined
                                                   with the authority to extend the                        verification process that supports                    eligible for coverage through Medicaid,
                                                   resolution period for inconsistencies not               eligibility determinations for insurance              CHIP, or a Basic Health Program, if
                                                   involving citizenship, status as a                      affordability programs. To implement                  applicable, within the State in which
                                                   national, or lawful presence for coverage               section 1411 of the Affordable Care Act,              the Exchange operates. We believe that
                                                   in 2014. We are considering whether                     we propose a general policy in                        this will result in limited, if any
                                                   and how to implement this authority,                    paragraph (a)(1), that the Exchange                   additional burden on the Exchange
                                                   such as whether to create a uniform                     verify information in accordance with                 given the high degree of coordination
                                                   standard or a rule to be applied on a                   this section only for an applicant who                between the Exchange, Medicaid, and
                                                   case-by-case basis; we solicit comments                 is requesting an eligibility                          CHIP. We also solicit comments as to
                                                   on these alternatives to inform our final               determination for insurance                           options for supporting verification
                                                   adoption of these rules.                                affordability programs. In this section,              across States with the goal of crafting a
                                                      Lastly, we note that this paragraph                  we propose standards related to the                   solution that maximizes accuracy while
                                                   does not apply in the event that an                     verification of eligibility for minimum               minimizing administrative burden for
                                                   application filer attests to household                  essential coverage other than through an              applicants and Exchanges.
                                                   income for an applicant that is at or                   eligible employer-sponsored plan;                        In paragraph (c), we propose the
                                                   below the applicable Medicaid or CHIP                   household income and household size;                  verification process related to income
                                                   MAGI-based income standards. Rather,                    enrollment in or eligibility for                      and family/household size. As
                                                   the Exchange will follow the process                    qualifying coverage in an eligible                    discussed earlier, while the statute
                                                   described in paragraph (c)(2)(ii)(C) for                employer-sponsored plan; and Medicaid                 specifies that income for advance
                                                   such individuals.                                       and CHIP immigration status                           payments of the premium tax credit and
                                                      In paragraph (f), we propose to codify               requirements. These verification                      cost-sharing reductions is calculated on
                                                   section 1411(c)(4)(B) of the Affordable                 processes apply to eligibility                        an annual basis, section 1902(e)(14)(H)
                                                   Care Act regarding flexibility in                       determinations for insurance                          of the Act, as added by section 2002(a)
                                                   verification methods. We propose that                   affordability programs. These                         of the Affordable Care Act, provides that
                                                   HHS may approve an Exchange plan or                     verification processes do not apply to                income for Medicaid is calculated on a
                                                   a significant change to an Exchange plan                eligibility determinations solely for the             current basis. Consequently, in this
                                                   to modify the methods for the collection                purpose of enrollment or to eligibility               section, we propose to require the
                                                   and verification of information as                      determinations for benefits provided to               Exchange to verify both annual
                                                   described in this subpart, as well as the               Indians based on status as an Indian,                 household income information and
                                                   specific information to be collected,                   which are addressed elsewhere.                        current household income information.
                                                   based on a finding by HHS that the                         Section 36B(c)(2)(B) of the Code                   We also note that the Medicaid
                                                   requested modification would reduce                     specifies that an individual who is                   proposed rule proposes certain
                                                   the administrative costs and burdens on                 eligible for minimum essential coverage               variations from the methodology used
                                                   individuals while maintaining accuracy                  through sources other than the                        for advance payments of the premium
                                                   and minimizing delay, that it would not                 Exchange and the individual market is                 tax credit and cost-sharing reductions
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   undermine coordination with Medicaid                    ineligible for advance payments of the                for both income and household size,
                                                   and CHIP, and that any applicable                       premium tax credit. Therefore, in order               which are discussed further in the
                                                   requirements under this subpart and                     to accurately determine eligibility for               preamble to 42 CFR 435.603. These
                                                   section 6103 of the Code with respect to                advance payments of the premium tax                   differences include the treatment of
                                                   the confidentiality, disclosure,                        credit, the Exchange needs to rule out                qualifying relatives claimed as tax
                                                   maintenance, or use of information will                 eligibility for other minimum essential               dependents by another taxpayer;
                                                   be met. We also note that all                           coverage. We propose paragraphs (b),                  children claimed as tax dependents by
                                                   information exchanges specified in this                 (d), and (e) of this section to meet this             non-custodial parents; pregnant women;
                                                   section must comply with § 155.260 and                  standard. First, in paragraph (b)(1), we              lump sum payments; scholarships or


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                                                   51214                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   fellowship grants that are used for                     information is representative of a                    in verifying an individual’s MAGI-based
                                                   educational purposes; and certain                       primary taxpayer’s likely situation for               income information, to the extent that
                                                   American Indian/Alaska Native income.                   the year for which coverage is                        such information is useful in
                                                   We solicit comments regarding how best                  requested.                                            conducting this verification. In this rule,
                                                   to ensure a streamlined eligibility                        We note that this proposal represents              we propose that the Exchange utilize
                                                   process given these underlying                          a modification of the statutory                       this data for purposes of Exchange
                                                   differences.                                            verification process, based on the                    determinations of eligibility for
                                                      In this section we use the term,                     authority granted to the Secretary in                 Medicaid and CHIP in a similar manner
                                                   application filer, as defined in                        section 1411(c)(4)(B) to modify the                   to how we propose the Exchange use tax
                                                   § 155.300(a). We note that the                          methods for obtaining data, including                 data for purposes of Exchange
                                                   application filer does not necessarily                  allowing an applicant to request that the             determinations of eligibility for advance
                                                   have to be the primary taxpayer. We                     Secretary of the Treasury provide return              payments of the premium tax credit and
                                                   believe that the proposed process will                  information directly to the Exchange                  cost-sharing reductions. That is,
                                                   support applications received through                   through the Secretary of HHS. We                      consistent with Medicaid regulations,
                                                   all channels, including electronically                  believe that this approach will be far                we propose that the Exchange treat the
                                                   and on paper, although we discuss                       more efficient for applicants, the                    list of current data sources described in
                                                   certain modifications that may be                       Exchange, and the Federal government                  42 CFR 435.948(a), proposed in the
                                                   needed to accommodate paper                             than the basic procedure described in                 Medicaid NPRM, as primary sources of
                                                   applications later in this section.                     the statute, which would require an                   MAGI-based income data for purposes
                                                      First, in paragraph (c)(1)(i)(A), we                 application filer to state MAGI and then              of verification.
                                                   propose that for all individuals whose                  have the Exchange check with the                         In paragraph (c)(1)(ii), we propose
                                                   income is counted in calculating a                      Secretary of the Treasury through HHS                 that the Exchange obtain the most recent
                                                   primary taxpayer’s household income,                    to see if this was consistent with the                income information for all individuals
                                                   in accordance with 26 CFR 1.36B–1(e)                    records of the Secretary of the Treasury.             whose income is counted in calculating
                                                   of the Treasury proposed rule, or an                    We believe that requiring an application              a primary taxpayer’s household income,
                                                   applicant’s household income, in                        filer to state MAGI would deter                       in accordance with 26 CFR 1.36B–1(e),
                                                   accordance with 42 CFR 435.603(d) of                    applications by essentially requiring an              or an applicant’s household income, in
                                                   the Medicaid proposed rule, and for                     application filer to possess a copy of the            accordance with 42 CFR 435.603(d),
                                                   whom the Exchange has a Social                          relevant tax return at the point of                   from the data sources described in 42
                                                   Security number or an adoption                          application, and would also reduce                    CFR 435.948(a) of the Medicaid
                                                   taxpayer identification number, the                     sharply the ability of the Exchange to                proposed rule, which lists the data
                                                   Exchange will request tax return data                   assist application filers in completing               sources for Medicaid eligibility
                                                   from the Secretary of the Treasury by                   the eligibility process. Further, without             determinations. We believe that this
                                                   submitting identifying information to                   the proposed modification, we believe                 step is necessary to implement our
                                                   HHS, which will in turn submit it to the                that a large number of applicants would               interpretation of the Affordable Care Act
                                                   Secretary of the Treasury. This                         be subject to the inconsistency process               regarding the Exchange’s role in
                                                   identifying information will include                    for income and household size, which                  determining Medicaid eligibility, and
                                                   name, Social Security number, and                       would then drive a rise in the amount                 does not create significant additional
                                                   relationship to the primary taxpayer                    of paper documentation required,                      burden as it is an existing procedure in
                                                   (filer, spouse, dependent), and like all                slowing down the overall eligibility                  Medicaid programs. We recognize that
                                                   other information submissions, will                     process.                                              42 CFR 435.948(a) includes multiple
                                                   only include the minimum information                       In accordance with the statute, we                 data sources, and we intend to provide
                                                   needed to complete the verification. In                 propose this modification after                       subregulatory guidance regarding how
                                                   paragraph (c)(1)(i)(B), we propose that                 determining that any applicable                       such information can be utilized in a
                                                   in the event that the identifying                       requirements under section 1411 of the                manner that is straightforward and
                                                   information for one or more individuals                 Affordable Care Act and section 6103 of               helpful to application filers. We also
                                                   does not match a tax record on file with                the Code with respect to the                          solicit comment on this topic.
                                                   the Secretary of the Treasury that may                  confidentiality, disclosure,                             In paragraphs (c)(2) and (c)(3) of this
                                                   be disclosed pursuant to the Code, HHS                  maintenance, and use of information                   section, we propose the verification
                                                   will notify the Exchange, and the                       can and will be met. To this end, we are              process for Medicaid and CHIP and for
                                                   Exchange must make a reasonable effort                  already working with the Secretary of                 advance payments of the premium tax
                                                   to confirm that the lack of a match is not              the Treasury and States to ensure that                credit and cost-sharing reductions,
                                                   due to an error in individual identifying               Treasury-required safeguards for tax                  respectively. We note that while we
                                                   information. This proposal is consistent                information will be met across the                    have drafted these sections separately,
                                                   with our proposal in § 155.315(e)(1) and                Exchange information technology                       we expect the Exchange to implement
                                                   is designed to ensure that the Exchange                 architecture, as specified in 45 CFR                  them in an integrated, streamlined
                                                   can maximize the use of available                       155.260(d).                                           process that will avoid redundancy and
                                                   electronic data sources in order to                        In order to incorporate Medicaid and               minimize confusion for applicants.
                                                   facilitate a streamlined eligibility                    CHIP into the streamlined eligibility                    We also note that the proposed
                                                   process.                                                process, it is necessary to have readily              process in these paragraphs are
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                                                      We solicit comments regarding how                    available current income data to fill a               designed to minimize burden on
                                                   the Exchange can best use available data                similar role to that proposed for                     application filers by only requiring an
                                                   to assist an application filer in                       Treasury data in paragraph (c)(1)(i) of               applicant to provide an attestation
                                                   navigating the components of the                        this section. Medicaid regulations at 42              regarding income if he or she attests that
                                                   eligibility process related to household                CFR 435.948(a), proposed in the                       available data sources are not
                                                   income and family/household size. We                    Medicaid NPRM, specify that a State                   representative of an applicant or
                                                   are particularly interested in comments                 Medicaid agency must request State                    primary taxpayer’s current or projected
                                                   regarding how to help an application                    quarterly wage information, as well as                financial situation, as applicable. For an
                                                   filer determine whether available tax                   other sources of current income, for use              electronic application, we believe that


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                            51215

                                                   the attestations required can be part of                Exchange direct an application filer to               Exchange finds that an application
                                                   a real-time process, in which an                        attest to the specific individuals who                filer’s attestation to a family’s projected
                                                   application filer would be shown                        comprise an applicant’s family for                    annual household income is not
                                                   information computed by the Exchange                    advance payments of the premium tax                   reasonably compatible with the
                                                   regarding MAGI-based income and                         credit and cost-sharing reductions,                   information regarding projected annual
                                                   annual household income and then                        within the meaning proposed in 26 CFR                 household income computed by the
                                                   offered the opportunity to affirm it or                 1.36B–1(d) of the Treasury proposed                   Exchange, including as a result of tax
                                                   provide different information. For a                    rule. This provision is designed to                   return data being unavailable, the
                                                   paper application, this approach will                   define the relevant primary taxpayer’s                Exchange will proceed in accordance
                                                   not be possible, and so the Exchange                    family, which is necessary to determine               with paragraphs (c)(3)(iii), (c)(3)(iv), and
                                                   will instead check the information                      income. We also propose the Exchange                  (c)(3)(vi), as applicable, which describe
                                                   provided by an application filer on a                   accept an application filer’s attestation             alternate verification processes. Section
                                                   paper application against data regarding                of family size without further                        1412(b)(2) of the Affordable Care Act
                                                   MAGI-based income and annual                            verification, except as provided in cases             provides that the Secretary provide
                                                   household income or provide the                         in which information is not reasonably                procedures for making advance
                                                   information computed based on data                      compatible with other data. We                        determinations for advance payments of
                                                   from sources to the application filer on                anticipate that the Exchange will                     the premium tax credit and cost-sharing
                                                   paper and request confirmation. We                      provide education and assistance to an                reductions on the basis of information
                                                   solicit comments as to how this process                 application filer such that attestations              other than a primary taxpayer’s most
                                                   can work most smoothly for both                         will be as close as possible to the                   recent tax return, ‘‘in cases where
                                                   electronic and paper applications.                      ultimate tax filing family. We believe                information included with an
                                                      First, in paragraph (c)(2)(i), we                    that requiring further verification of this           application form demonstrates
                                                   propose the Exchange direct an                          is extremely difficult and may not be                 substantial changes in income, changes
                                                   application filer to attest to the specific             possible and that any verification would              in family size or other household
                                                   individuals who comprise an                             be of limited use while adding                        circumstances, change in filing status,
                                                   applicant’s household for Medicaid and                  significant burden and delay to the                   the filing of an application for
                                                   CHIP, within the meaning proposed in                    process. We also propose that to the                  unemployment benefits, or other
                                                   42 CFR 435.603(f) of the Medicaid                       extent the Exchange finds that an                     significant changes affecting eligibility.’’
                                                   NPRM. This provision is designed to                     application filer’s attestation of family             The statute specifies that these alternate
                                                   define the relevant Medicaid and CHIP                   size is not reasonably compatible with                procedures should apply to a primary
                                                   household, which is necessary to                        other information provided by the                     taxpayer whose income has decreased
                                                   determine income. We also propose that                  application filer for the family, the                 by at least 20 percent, is filing an
                                                   Exchange accept an application filer’s                  Exchange may utilize data obtained                    application for unemployment benefits,
                                                   attestation regarding the members of his                through electronic data sources to verify             or is not required to file a tax return, as
                                                   or her household without further                        the attestation. We also propose that if              well as to other primary taxpayers
                                                   verification, unless the Exchange finds                 such data sources are unavailable or not              specified by the Secretary.
                                                   that the attestation is not reasonably                  reasonably compatible with the                           In paragraphs (c)(3)(iii) and (c)(3)(iv),
                                                   compatible with other information                       attestation, the Exchange will follow the             we propose to codify this provision of
                                                   provided by the application filer for the               procedures specified in § 155.315(e) of               the statute by directing that the
                                                   applicant or in the records of the                      this subpart.                                         Exchange use an alternate process for
                                                   Exchange, in which case the Exchange                       In paragraphs (c)(3)(ii)–(vi), we                  determining income for purposes of
                                                   may utilize data obtained through                       propose the verification process for                  advance payments of the premium tax
                                                   electronic data sources to verify the                   income for purposes of advance                        credit and cost-sharing reductions for
                                                   attestation. If such data sources are                   payments of the premium tax credit and                primary taxpayers in certain situations.
                                                   unavailable or information in such data                 cost-sharing reductions. In paragraph                 In both (c)(3)(iii) and (c)(3)(iv), as
                                                   sources is not reasonably compatible                    (c)(3)(ii)(A), we propose the Exchange                section 1412(b)(2) specifies that the
                                                   with the application filer’s attestation,               compute annual household income for                   alternate process is limited to eligibility
                                                   the Exchange may request additional                     the family defined by the application                 determinations for advance payments of
                                                   documentation to support the                            filer, based on the electronic data                   the premium tax credit and cost-sharing
                                                   attestation within the procedures                       acquired pursuant to paragraph (c)(1)(i)              reductions, we propose that the
                                                   specified in 45 CFR 435.952.                            of this section, and that the application             alternate processes are only available to
                                                      Second, in paragraph (c)(2)(ii), we                  filer validate this information by                    a primary taxpayer for whom an
                                                   propose that the Exchange verify MAGI-                  attesting whether it represents an                    application filer (who can be the
                                                   based income for purposes of                            accurate projection of the family’s                   primary taxpayer) has not established
                                                   determining eligibility for Medicaid and                household income for the benefit year                 MAGI-based household income that is
                                                   CHIP by following the procedures                        for which coverage is requested.                      at or below the applicable Medicaid or
                                                   described in 42 CFR 435.948 and 42                         In paragraph (c)(3)(ii)(B), we propose             CHIP MAGI-based income standard.
                                                   CFR 435.952. We solicit comments as to                  that if tax data are unavailable, or if an            That is, if an individual is or may be
                                                   how the Exchange process and the                        application filer attests that the                    eligible for Medicaid or CHIP, this step
                                                   Medicaid and CHIP processes can be                      Exchange’s computation does not                       in the verification process is not
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                                                   streamlined to ensure consistency and                   represent an accurate projection of the               applicable because the applicant will
                                                   maximize the portion of eligibility                     family’s household income for the                     not be eligible for advance payments of
                                                   determinations that can be completed in                 benefit year for which coverage is                    the premium tax credit or cost-sharing
                                                   a single session.                                       requested, the Exchange will direct the               reductions.
                                                      In paragraph (c)(3), we propose the                  application filer to attest to the family’s              First, in paragraph (c)(3)(iii), we
                                                   verification process for advance                        projected household income for the                    propose procedures for situations in
                                                   payments of the premium tax credit and                  benefit year for which coverage is                    which an application filer attests that a
                                                   cost-sharing reductions, First, in                      requested. Lastly, in paragraph                       primary taxpayer’s annual household
                                                   paragraph (c)(3)(i), we propose the                     (c)(3)(ii)(C), we propose that if the                 income has increased or is reasonably


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                                                   51216                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   expected to increase from the                           does not meet the 20 percent threshold                Exchange determine eligibility for these
                                                   information obtained from his or her tax                offered in the statute, but meets some                primary taxpayers for advance payments
                                                   return. In such a situation, we propose                 other threshold, to use the alternate                 of the premium tax credit and cost-
                                                   the Exchange accept the application                     process. This would create a greater                  sharing reductions based on the income
                                                   filer’s attestation without further                     possibility that a primary taxpayer with              from the primary taxpayer’s tax data. At
                                                   verification, except as provided in                     a fairly significant decrease in income               a minimum, the tax return data used for
                                                   paragraph (c)(3)(iii)(B). This approach to              would be able to purchase coverage.                   this purpose should be from the taxable
                                                   verification is proposed because such                      In paragraph (c)(3)(v), we propose the             year ending with or within the second
                                                   attestation would result in the Federal                 alternative process for verifying income              calendar year preceding the calendar
                                                   government providing a lower advance                    for primary taxpayers for whom an                     year in which the benefit year begins.
                                                   payment than would otherwise be                         application filer attested to a decrease in              In paragraph (c)(4), we propose the
                                                   provided based on the primary                           household income or for whom tax                      Exchange provide education and
                                                   taxpayer’s most recent available tax                    return data is unavailable, as described              assistance to an application filer
                                                   return.                                                 in paragraph (c)(3)(iv) of this section.              regarding the verification process for
                                                      However, in order to ensure that such                Under these proposed procedures, the                  income and family/household size. We
                                                   an attestation does not understate                      Exchange will first attempt to verify the             solicit comments as to strategies that the
                                                   income, in paragraph (c)(3)(iii)(B), we                 application filer’s attestation of                    Exchange can employ to ensure that
                                                   propose that if the Exchange finds that                 projected annual household income for                 application filers understand the
                                                   the application filer’s attestation is not              the primary taxpayer by using an                      validation process and provide well-
                                                   reasonably compatible with other                        annualized version of the MAGI-based                  informed validations and attestations,
                                                   information provided by the application                 income data obtained in accordance                    including, but not limited to,
                                                   filer or the MAGI-based income                          with paragraph (c)(1)(ii). In the event               developing ways to best display the data
                                                   information acquired by the Exchange                    that this is unsuccessful, we propose                 acquired from data sources and
                                                   pursuant to paragraph (c)(1)(ii), the                   that the Exchange attempt to verify the               potentially accessing other data sources
                                                   Exchange may utilize data obtained                      application filer’s attestation using any             that might be informative. We intend to
                                                   through electronic data sources to verify               other electronic data sources that have               provide subregulatory guidance on this
                                                   the attestation. If this approach is                    been approved by HHS. HHS will                        topic.
                                                   unsuccessful, the Exchange may request                  approve other electronic data sources
                                                                                                                                                                    In paragraph (d), we propose that the
                                                   additional information in accordance                    based on evidence showing that such
                                                   with the procedures specified in                        data sources are sufficiently accurate                Exchange verify whether an applicant is
                                                   § 155.315(e) of this subpart.                           and offer less administrative complexity              enrolled in an eligible employer-
                                                      In paragraph (c)(3)(iv), we propose to               than paper verification. In paragraph                 sponsored plan by accepting his or her
                                                   codify the minimum requirements of                      (c)(3)(v)(C), if such steps are                       attestation without further verification,
                                                   section 1412(b)(2) of the Affordable Care               unsuccessful, we propose the Exchange                 except as provided in paragraph (d)(2)
                                                   Act, described above, regarding the                     follow the procedures specified in                    in cases in which information is not
                                                   circumstances under which an                            § 155.315(e) of this subpart.                         reasonably compatible with other data.
                                                   application filer who is attesting to a                    In paragraph (c)(3)(v)(D), we propose              Although section 36B(c)(2)(C) of the
                                                   decrease in income for a primary                        to clarify that if at the conclusion of the           Code provides that an individual is
                                                   taxpayer, or is attesting to income                     90-day period, an application filer has               eligible for the premium tax credit
                                                   because tax return data is unavailable,                 not responded to a request for                        provided that his or her coverage
                                                   may utilize an alternate income                         additional information from the                       through an eligible employer-sponsored
                                                   verification process. We clarify that this              Exchange in accordance with this                      plan is not affordable or does not
                                                   provision does not supersede                            section and the data sources specified in             provide minimum value, clause (iii) of
                                                   § 155.305(f)(4), which prohibits the                    paragraph (c)(1) indicate that an                     that subparagraph prohibits eligibility
                                                   Exchange from determining a primary                     applicant in the primary taxpayer’s                   for the premium tax credit if the
                                                   taxpayer eligible for advance payments                  family is eligible for Medicaid or CHIP,              individual is enrolled in an eligible
                                                   of the premium tax credit if advance                    the Exchange will not provide the                     employer-sponsored plan, regardless of
                                                   payments were made on behalf of the                     applicant with eligibility for advance                the cost or value of that plan. We
                                                   primary taxpayer or his or her spouse                   payments of the premium tax credit or                 propose that the Exchange accept an
                                                   for a year for which tax data would be                  cost-sharing reductions based on the                  applicant’s attestation without further
                                                   utilized for verification of household                  application, in order to ensure that                  verification, with provisions in cases in
                                                   income and family size and the primary                  applicants who are eligible for Medicaid              which the attestation is not reasonably
                                                   taxpayer or his or her spouse did not                   or CHIP are not determined eligible for               compatible with other data, because we
                                                   comply with the requirement to file a                   advance payments or cost-sharing                      believe that an applicant generally
                                                   tax return for that year as required by 26              reductions as a result of non-                        understands whether or not he or she is
                                                   CFR 1.6011–8 (proposed in the Treasury                  compliance. In paragraph (c)(3)(v)(E),                enrolled in an eligible employer-
                                                   proposed rule).                                         we propose that in other situations in                sponsored plan. We solicit comments as
                                                      We anticipate that this alternate                    which the Exchange remains unable to                  to whether this is a reasonable
                                                   process may also accommodate a                          verify an application filer’s attestation,            assumption. Similar to the provisions
                                                   situation in which an applicant does not                it will determine an applicant’s                      regarding residency and income
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   have a Social Security number or a non-                 eligibility based on the information                  verification, we propose to allow the
                                                   applicant who is listed on an                           described in paragraph (c)(3)(ii)(A). In              Exchange to request additional
                                                   application as a family member does not                 paragraph (c)(3)(vi), we propose to                   information regarding whether an
                                                   have or does not provide a Social                       codify section 1412(b)(1)(B) of the                   applicant is enrolled in an eligible
                                                   Security number. We solicit comment                     Affordable Care Act regarding primary                 employer-sponsored plan if an
                                                   on what other situations should justify                 taxpayers who do not meet the criteria                applicant’s attestation is not reasonably
                                                   use of the alternate process. One                       specified in paragraph (c)(3)(iii) or                 compatible with other information
                                                   potential approach is to allow a primary                (c)(3)(iv) for use of an alternate income             provided by the applicant or in the
                                                   taxpayer with a decrease in income that                 verification process. We propose the                  records of the Exchange. We solicit


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                                                   comments regarding the best data                        information either directly to their                     We invite comment on the timing and
                                                   sources for this element of the process.                employees, to the IRS and/or to the                   reporting of information needed to
                                                      In paragraph (e)(1), we propose that                 Department of Labor. These provisions                 verify whether an employed applicant is
                                                   the Exchange require an applicant to                    include, but are not limited to, section              eligible for an advance payment of the
                                                   attest to his or her eligibility for                    6056 of the Code, as added by section                 premium tax credit and cost-sharing
                                                   qualifying coverage in an eligible                      1514 of the Affordable Care Act                       reductions and how best for Exchanges
                                                   employer-sponsored plan for the                         (requiring employers to report to the IRS             to interact and communicate with
                                                   purposes of eligibility for advance                     specific information related to                       employers to verify information
                                                   payments of the premium tax credit and                  employer-sponsored health coverage                    regarding employer-sponsored coverage.
                                                   cost-sharing reductions.                                provided to employees); section 2715 of               Specifically, we invite comment on (1)
                                                      In paragraph (e)(2), we propose that                 the PHS Act, as amended by section                    whether a template would be helpful
                                                   the Exchange verify this information.                   1001 of the Affordable Care Act                       and, if so, how it could be designed to
                                                   We solicit comments regarding how the                   (requiring group health plans and health              capture plan-level information that is
                                                   Exchange may handle a situation in                      insurance issuers to disclose to eligible             already reported to employees, the IRS
                                                   which it is unable to gain access to                    individuals information about the                     and/or the Department of Labor, and (2)
                                                   authoritative information regarding an                  employer-sponsored health plan(s) or                  whether the development of a central
                                                   applicant’s eligibility for qualifying                  coverage option(s) available to them);                database is an attractive option for
                                                   coverage in an eligible employer-                       and section 18B of the Fair Labor                     employers to provide information about
                                                   sponsored plan.                                         Standards Act, as added by section 1512               the coverage offered under eligible
                                                      Exchanges will interact with                         of the Affordable Care Act (requiring                 employer-sponsored plans. We note that
                                                   employees and their employers in order                  employers to disclose to employees                    the Treasury Department and the IRS
                                                   to make a determination of eligibility for              information regarding Exchange                        also intend to request comments on the
                                                   advance payments of the premium tax                     coverage options).                                    employer information reporting
                                                   credit and cost-sharing reductions.                                                                           required under section 6056 of the
                                                                                                              In developing the standards for
                                                   Specifically sections 1401 and 1402 of                                                                        Code.
                                                   the Affordable Care Act establish that an               Exchange verification of eligibility for
                                                   applicant is eligible for advance                       qualifying coverage in an eligible                       In paragraph (f), we propose a process
                                                   payments of the premium tax credit or                   employer-sponsored plan, HHS and the                  regarding the verification of specific
                                                   cost-sharing reductions only if he or she               Departments of the Treasury and Labor                 immigration status standards for
                                                   is not eligible for qualifying coverage in              are working together to coordinate how                Medicaid and CHIP. The immigration
                                                   an eligible employer-sponsored plan                     needed information could be reported in               status standards for eligibility for
                                                   that meets a minimum value standard                     order to make it efficient and easy for               enrollment in a QHP differ from those
                                                   and is affordable under section                         employees to access it and to minimize                for Medicaid and CHIP, with the
                                                   36B(c)(2)(C) of the Code, as added by                   burden on employers. For example,                     exception of the standard for pregnant
                                                   the Affordable Care Act. Section 1411(b)                consideration is being given to whether               women and children in certain States
                                                   of the Affordable Care Act directs an                   Exchanges could provide a template that               that have adopted the State option
                                                   applicant seeking advance payments of                   both employers and employees could                    under section 1903(v)(4) of the Act, as
                                                   the premium tax credit and cost-sharing                 use to capture information already                    added by section 214 of the Children’s
                                                   reductions through the Exchange to                      reported under the provisions cited                   Health Insurance Program
                                                   provide to the Exchange specific                        above. A template might help                          Reauthorization Act (Pub. L. 111–3, 123
                                                   information for purposes of determining                 employees to have ready-access to the                 Stat. 8), further, the ‘reasonably
                                                   eligibility, including (1) The name,                    plan-level information they need for the              expected’ element discussed in
                                                   address and Employer Identification                     Exchange application process, and for                 § 155.305(a)(1) does not apply to any
                                                   Number (if available) of the employer;                  employers, it might support a uniform                 population in Medicaid or CHIP. In
                                                   (2) whether the applicant is a full-time                verification process that would simplify              paragraph (f), we propose that the
                                                   employee and whether the employer                       employers’ interactions with the                      Exchange verify whether an applicant
                                                   provides minimum essential coverage;                    Exchanges.                                            requesting an eligibility determination
                                                   and (3) if the employer provides                           We are also considering the feasibility            for insurance affordability programs
                                                   minimum essential coverage, the lowest                  of a central database that employers                  under § 155.310(b) who is not a citizen
                                                   cost option for the applicant’s                         voluntarily could populate as a                       or national meets the immigration status
                                                   enrollment status and the applicant’s                   potential resource for the verification               and five-year waiting period for
                                                   contribution under the employer-                        process. A consolidated database could                Medicaid and CHIP as specified under
                                                   sponsored plan. Additionally, we                        be drawn upon for the purposes of                     42 CFR 435.406, 42 CFR 457.320,
                                                   recognize that Exchanges may need                       verifying the information provided by                 1903(v)(4) of the Act, section
                                                   additional information about employer-                  applicants seeking eligibility for                    2107(e)(1)(J) of the Act, and section 403
                                                   sponsored health plans to complete                      advance payments of the premium tax                   of the Personal Responsibility and Work
                                                   eligibility determinations such as                      credit and cost-sharing reduction. Such               Opportunity Reconciliation Act
                                                   information about whether such plans                    database would include the appropriate                (PRWORA) of 1996 (Pub. L. 104–493,
                                                   are available to spouses and dependents                 privacy and security safeguards                       110 Stat. 2105), as applicable. We clarify
                                                   and whether they meet the minimum                       necessary to protect the information                  that we do not consider eligibility for
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                                                   value standard.                                         provided. We recognize that employers                 Medicaid coverage that is restricted to
                                                      Under several statutory reporting                    will need to accumulate both plan-level               emergency services to qualify an
                                                   provisions, employers already will                      and employee-level information for                    individual as eligible for Medicaid. We
                                                   provide much, if not all, of the                        purposes of reporting under section                   anticipate that the Exchange will
                                                   information the Exchanges will need to                  6056 of the Code (as added by section                 determine whether an individual meets
                                                   determine eligibility for advance                       1514 of the Affordable Care Act). We are              this standard while verifying the
                                                   payments of the premium tax credit and                  considering whether and how the same                  individual’s citizenship, status as a
                                                   cost-sharing reductions. Under these                    plan-level information could be                       national, or lawful presence as required
                                                   provisions, employers will provide                      incorporated into such a database.                    in § 155.315(b).


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                                                   51218                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                      As section 36B(c)(1)(B) of the Code,                 year in two situations: first, if an                  not propose to require the Exchange to
                                                   which is also referenced in section 1402                enrollee reports updated information                  seek or receive an affirmation from an
                                                   of the Affordable Care Act in defining                  and the Exchange verifies it; and                     enrollee that such information is
                                                   eligibility for cost-sharing reduction,                 second, if the Exchange identifies                    accurate prior to using it in an eligibility
                                                   provides that an applicant who is                       updated information through the                       determination. We note, however, that
                                                   lawfully present in the United States,                  limited data matching to identify                     like all eligibility determinations, such
                                                   has household income below 100                          individuals who have died or gained                   a determination would result in a notice
                                                   percent of the FPL, and is not eligible                 eligibility for a public health insurance             to an enrollee and would be subject to
                                                   for Medicaid based on immigration                       program, as described in paragraph (c)                appeal.
                                                   status is eligible for the premium tax                  of this section.                                         In paragraph (c)(2), we propose to
                                                   credit, we believe that 42 CFR                             In paragraph (b)(1), we propose that               allow the Exchange to make additional
                                                   435.406(a)(2) and section 403 of                        an individual who enrolls in a QHP                    efforts to identify and act on changes
                                                   PRWORA do not apply to advance                          with or without advance payments of                   that may affect an enrollee’s eligibility
                                                   payments of the premium tax credit and                  the premium tax credit or cost-sharing                to the extent that HHS approves an
                                                   cost-sharing reductions. Therefore, we                  reductions must report any changes to                 Exchange Plan in accordance with
                                                   propose a definition of ‘‘lawfully                      the Exchange with respect to the                      § 155.105(d) or a significant change to
                                                   present’’ that is not limited to ‘‘qualified            eligibility standards specified in                    the Exchange Plan in accordance with
                                                   alien’’ as defined in PRWORA.                           § 155.305 within 30 days of such                      § 155.105(e) to modify the process.3 We
                                                                                                           change. In paragraph (b)(2), we propose               propose that such approval would be
                                                   f. Eligibility Redetermination During a                 that the Exchange use the verification                granted if HHS finds that such a
                                                   Benefit Year (§ 155.330)                                procedures at the point of initial                    modification would reduce the
                                                      Section 1411(f)(1)(B) of the Affordable              application for any changes reported by               administrative costs and burdens on
                                                   Care Act specifies that the Secretary                   an individual prior to using the self-                individuals while maintaining accuracy
                                                   shall establish procedures by which the                 reported data in an eligibility                       and minimizing delay, that such
                                                   Secretary or another Federal official                   determination. These changes could                    changes would not undermine
                                                   redetermines an individual’s eligibility                include, but are not limited to, changes              coordination with Medicaid and CHIP,
                                                   on a periodic basis. Consistent with our                in incarceration status, residency,                   and that any applicable provisions
                                                   proposal that the Exchange conduct                      immigration status, household income                  under § 155.260, § 155.270, § 155.310(f),
                                                   initial eligibility determinations, in                  or household size, or in the availability             and section 6103 of the Code with
                                                   § 155.330, we outline procedures for                    of qualifying coverage in an eligible                 respect to the confidentiality,
                                                   redeterminations during a benefit year                  employer-sponsored plan, which could                  disclosure, maintenance, or use of
                                                   consistent with section 1411(f)(1)(B) of                be driven by changes in employment.                   information will be met. This provision
                                                   the Affordable Care Act. We note that                      We solicit comments regarding                      is consistent with our proposal in
                                                   the goal of the eligibility                             whether we should require or allow the                § 155.315(e).
                                                   redetermination process is to ensure                    Exchange to limit the requirement on an                  As an alternative, we also considered
                                                   that an individual’s eligibility reflects               individual to report changes in income                directing the Exchange to use electronic
                                                   his or her circumstances with respect to                to changes of a certain magnitude. For                data sources to determine whether other
                                                   the eligibility standards specified in                  example, one alternative would be for                 pieces of information regarding an
                                                   § 155.305, while minimizing                             the Exchange to require an individual to              enrollee’s eligibility have changed from
                                                   administrative complexity for enrollees                 report all changes to non-income                      the prior eligibility determination in any
                                                   and the Exchange.                                       information that affect his or her                    way that would affect his or her
                                                      The redetermination process that we                  eligibility within 30 days of a change,               eligibility, or to allow this without the
                                                   propose in this section relies primarily                but only require an individual to report              process described in paragraph (c)(2).
                                                   on the individual to provide the                        changes of greater than five, ten, or 15              Under such a scenario, the Exchange
                                                   Exchange with updated information                       percent of income. This could limit the               could either take action without seeking
                                                   during the benefit year, as opposed to                  number of changes reported, but also                  the enrollee’s confirmation or notify the
                                                   having the Exchange examine electronic                  could add to enrollee confusion                       enrollee of the change and provide him
                                                   data sources and/or contact the                         regarding when a change is required to                or her with an opportunity to affirm the
                                                   individual in order to determine                        be reported. We also note that this                   information. We solicit comments
                                                   whether a change has occurred during                    provision would have no effect on                     regarding whether and how we should
                                                   the year. This primary reliance on                      whether an individual was liable for                  approach additional data matching,
                                                   individuals would eliminate much of                     repayment of excess advance payments                  whether the Exchange should modify an
                                                   the administrative burden associated                    of the premium tax credit.                            enrollee’s eligibility based on electronic
                                                   with periodic electronic data matching                     In paragraph (c), we propose that the              data in the event that he or she did not
                                                   and any follow-up with individuals.                     Exchange periodically examine certain                 respond to a notice regarding the
                                                   That said, we have included a provision                 data sources used to support the initial              updated information, and whether there
                                                   for State flexibility in this area, and we              eligibility process, specifically those               are other procedures that could support
                                                   solicit comments as to whether there                    data sources described in § 155.315(b)(1)             the goals of the redetermination process
                                                   should be an ongoing role for Exchange-                 and § 155.320(b) of this part, to identify            for changes during the benefit year.
                                                   initiated data matching beyond what is                  death and eligibility determinations for                 In paragraph (d), we propose that to
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                                                   proposed in this rule and the allowance                 Medicare, Medicaid, or CHIP. We                       the extent that the Exchange verifies
                                                   for flexibility. We also solicit comments               propose to limit proactive examination                updated information reported by an
                                                   as to whether the Exchange should offer                 to these pieces of information as they                enrollee or identifies updated
                                                   an enrollee an option to be periodically                come from these data sources and                      information through data matching in
                                                   reminded to report any changes that                     provide clear-cut indications of                      accordance with paragraph (c), the
                                                   have occurred.                                          eligibility for enrollment in a QHP and               Exchange determine the enrollee’s
                                                      In paragraph (a), we propose that the                advance payments of the premium tax
                                                   Exchange redetermine the eligibility of                 credit and cost-sharing reductions.                    3 This provision is proposed in the Exchange

                                                   an enrollee in a QHP during the benefit                 Consequently, in paragraph (d), we do                 NPRM at 76 FR 41866 (July 15, 2011).



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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                         51219

                                                   eligibility and provide an eligibility                  affordability programs do not create                  from the Secretary of Treasury and other
                                                   notice in accordance with the process                   coverage gaps for individuals.                        data sources as described in
                                                   described in § 155.305 and § 155.310(f),                                                                      § 155.320(c)(1), and provide such
                                                                                                           g. Annual Eligibility Redetermination
                                                   respectively. We also note that in                                                                            updated information to the enrollee in
                                                                                                           (§ 155.335)
                                                   accordance with § 155.340(a), the                                                                             the notice described in § 155.335(c). We
                                                   Exchange will notify an enrollee’s QHP                     In § 155.335, we outline procedures                solicit comment regarding whether and
                                                   if it determines that his or her eligibility            for annual redeterminations, consistent               how we should approach additional
                                                   has changed.                                            with section 1411(f)(1)(B) of the                     data matching, and whether there are
                                                      In paragraph (e)(1), we propose that                 Affordable Care Act. Similar to our                   alternatives that could support the goals
                                                   changes resulting from a                                rationale for redeterminations during                 of the redetermination process.
                                                   redetermination during the benefit year                 the coverage year, we believe that                       In paragraph (c), we propose that the
                                                   be effective for the first day of the                   conducting annual redeterminations at                 Exchange provide an enrollee with an
                                                   month following the notice of eligibility               the Exchange level would ensure that                  annual redetermination notice. Such
                                                   determination described in paragraph                    the eligibility process for the Exchange,             notice will include: any updated tax
                                                   (d)(2). In paragraph (e)(2), we allow an                Medicaid, and CHIP is streamlined and                 return data and current household
                                                   exception, subject to the authorization                 seamless.                                             income data obtained by the Exchange,
                                                   of HHS, in which the Exchange could                        In paragraph (a), we propose that the              if the enrollee requested an eligibility
                                                   establish a ‘‘cut-off date’’ for changes                Exchange redetermine the eligibility of               determination for insurance
                                                   resulting from a redetermination during                 an enrollee in a QHP on an annual basis,              affordability programs; the data used in
                                                   the coverage year to be considered                      which would ensure that eligibility                   the enrollee’s most recent eligibility
                                                   effective for the first day of the month                determinations remain current and                     determination; and the enrollee’s
                                                   following the month in which changes                    follow the process proposed for the                   ‘‘projected eligibility determination’’
                                                   would otherwise be effective, if not for                Medicaid program in 42 CFR 435.916.                   incorporating any updated income
                                                   the existence of the cut-off date. For                  We clarify that this redetermination will             information obtained under paragraph
                                                   example, under this proposal, the                       consider eligibility for enrollment in a              (b), and including, if applicable, the
                                                   Exchange could determine that in order                  QHP, and to the extent that an enrollee               amount of the advance payments of the
                                                   to be effective on October 1, a                         has a request for an eligibility                      premium tax credit or level of any cost-
                                                   redetermination would have to be                        determination for insurance                           sharing reductions for which he or she
                                                   completed by September 15th. We                         affordability programs on file with the               would be eligible. We solicit comment
                                                   solicit comment as to whether this                      Exchange, as described in § 155.310(b),               regarding the contents of the notice and
                                                   should or should not necessitate an                     consider his or her eligibility for such              whether additional information should
                                                   authorization from HHS, and if there                    programs. We solicit comments on                      be provided.
                                                   should be a uniform timeframe across                    whether the procedures proposed in                       In paragraph (d), we propose that the
                                                   all Exchanges. In addition, we solicit                  § 155.330 should satisfy the annual                   Exchange direct an individual to report
                                                   comment as to whether this is the                       redetermination as well, and if so,                   any changes relative to the information
                                                   appropriate policy for the effective date               whether this should be a Federal                      listed on the redetermination notice
                                                   for changes.                                            standard or an Exchange option.                       within 30 days of the date of the notice.
                                                      In paragraph (e)(3), we propose that if              Permitting or requiring a                             Our goal is to ensure that the timeframe
                                                   the eligibility determination results in                redetermination that occurs during the                is long enough for individuals to reply,
                                                   an individual being ineligible to                       coverage year to take the place of the                but short enough to serve the purpose of
                                                   continue his or her enrollment in a                     annual redetermination could spread                   timely redeterminations; we solicit
                                                   QHP, the Exchange will maintain his or                  some of the eligibility workload for the              comments as to whether this is an
                                                   her eligibility for enrollment in a QHP                 Exchange across the year and reduce the               appropriate timeframe. In paragraph (e),
                                                   for a full month after the month in                     number of times when an individual has                we propose that the Exchange verify any
                                                   which the determination notice                          to review and potentially affirm or                   changes reported by the individual
                                                   described in paragraph (d) is sent by the               update eligibility information but might              under paragraph (d) using the same
                                                   Exchange, although it will discontinue                  take away from the simplicity offered by              verification procedures used at the point
                                                   advance payments of the premium tax                     a process that occurs at a consistent                 of initial application, including the
                                                   credit and cost-sharing reductions in                   point in the year for all individuals.                provisions regarding inconsistencies,
                                                   accordance with the effective dates                     Furthermore, determinations of                        with the procedures modified for the
                                                   specified in paragraphs (e)(1) and (e)(2).              eligibility for advance payments of the               specific type of information subject to
                                                   We believe that allowing for this                       premium tax credit and cost-sharing                   the inconsistency process.
                                                   continuity of coverage allows for                       reductions are based on the most recent                  In paragraph (f)(1), we propose that
                                                   adequate time for an enrollee to conduct                tax data available, so these                          the Exchange require an enrollee to sign
                                                   necessary follow-up with the Exchange                   determinations need to be made on an                  and return the notice specified in
                                                   without providing financial assistance                  annual basis as more recent information               paragraph (c). However, in paragraph
                                                   that would later have to be recouped at                 becomes available. We solicit comment                 (f)(2), we propose that if an enrollee
                                                   the point of reconciliation. We note that               on how this interaction can be                        does not sign and return the notice, the
                                                   this does not preclude an enrollee from                 streamlined, and at what point annual                 Exchange will proceed in accordance
                                                   terminating coverage prior to the                       redeterminations should occur.                        with the procedures specified in
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                                                   termination of his or her eligibility,                     In paragraph (b), we propose that in               paragraph (g)(1) of this section, meaning
                                                   provided that the termination is                        the case of an annual redetermination                 that it will redetermine his or her
                                                   permissible under § 155.430. Alternative                for an enrollee who has a request for an              eligibility based on the information
                                                   options could include a shorter or                      eligibility determination for insurance               provided in the notice. This proposal is
                                                   longer time period, or different time                   affordability programs on file with the               designed to minimize the risk of
                                                   periods for specific types of changes.                  Exchange, the Exchange conduct                        individuals losing coverage when they
                                                   We solicit comment on this topic, as                    electronic data matching to obtain                    remain eligible. It is one strategy that
                                                   well as on approaches to ensuring that                  updated tax return information and                    has been proven to increase retention
                                                   transitions between insurance                           current household income information                  rates, and would reduce the


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                                                   51220                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   administrative burden and associated                    redetermination notice, along with any                any required changes within the
                                                   costs for the Exchange, as is outlined in               information that an enrollee has                      effective dates specified in § 155.330
                                                   several studies that found a majority of                provided in response to such notice that              and § 155.335.
                                                   individuals were disenrolled based on a                 the Exchange has verified; (ii) notify the               In paragraph (a)(1), we propose that in
                                                   failure to return requests for information              enrollee in accordance with the                       the event of a determination of an
                                                   rather than for no longer meeting the                   procedures in § 155.310(f); and (iii) if              individual’s eligibility or ineligibility
                                                   substantive eligibility standards.4                     applicable, notify the enrollee’s                     for advance payments of the premium
                                                      We recognize that advance payments                   employer, in accordance with the                      tax credit or cost-sharing reductions,
                                                   of the premium tax credit are subject to                procedures in § 155.310(g). In paragraph              including a change in the level of
                                                   reconciliation by the Treasury. If                      (g)(2), we propose that to the extent that            advance payments of the premium tax
                                                   advance payments are made where an                      the Exchange is unable to verify a                    credit or cost-sharing reductions for
                                                   enrollee does not respond to a notice to                change reported by an enrollee as of the              which he or she is eligible, the
                                                   tell the Exchange that he or she will no                close of the 30-day period, the Exchange              Exchange provide information to the
                                                   longer be eligible for advance payments                 redetermine the enrollee’s eligibility                issuer of the QHP selected by the
                                                   for the coming year (such as where the                  after completing verification. We expect              individual or in which the individual is
                                                   enrollee has new employment that will                   that this redetermination would occur                 enrolled.
                                                   provide minimum essential coverage),                    as soon as the verification process is                   In paragraph (a)(2), we propose that
                                                   the enrollee may have to repay some or                  completed.                                            the Exchange provide eligibility and
                                                   all of the advance payments as                             In paragraph (h), we propose that                  enrollment information to HHS to
                                                   additional tax. Thus, an enrollee has an                changes resulting from an enrollee’s                  enable HHS to begin, end, or adjust
                                                   interest in actively reviewing his or her               annual eligibility redetermination                    advance payments of the premium tax
                                                   annual redetermination notice and                       follow the same rules regarding effective             credit and cost-sharing reductions. We
                                                   managing his or her eligibility                         dates as those proposed in § 155.330.                 solicit comment on whether the
                                                   information to ensure that his or her                   We solicit comment as to whether the                  information could be used by HHS to
                                                   eligibility for advance payments of the                 effective dates for changes made as a                 support any reporting necessary for
                                                   premium tax credit is updated as                        result of an annual redetermination                   monitoring, evaluation, and program
                                                   quickly as possible after a change                      should be different from the effective                integrity. We solicit comment as to how
                                                   occurs. We solicit comment on policy                    dates for changes made as a result of a               this interaction can work as smoothly as
                                                   and operational strategies to improve                   redetermination that occurs during the                possible and the scope of information
                                                   the accuracy of determinations and                      coverage year.                                        that should be transmitted among the
                                                   policy options that could allow an                         In paragraph (i), we propose that if an            relevant agencies.
                                                   individual the choice to opt out of                     enrollee remains eligible for coverage in                In paragraph (a)(3), we propose that
                                                   having his or her eligibility                           a QHP upon annual redetermination,                    the notification specified in paragraph
                                                   redetermined based on the information                   the enrollee will remain in the QHP                   (a) include the information necessary to
                                                   contained in the annual redetermination                 selected the previous year unless the                 enable the issuer of the QHP to
                                                   notice. We also solicit comment as to                   enrollee takes action to select a new                 implement or discontinue the
                                                   what steps the Exchange could take to                   QHP within an enrollment period or                    implementation of an individual’s
                                                   ensure that redetermination minimizes                   terminate coverage in accordance with                 advance payments of the premium tax
                                                   burden on individuals, QHPs, and the                    45 CFR 155.430, as proposed at 76 FR                  credit or cost-sharing reductions, or
                                                   Exchange without increasing                             41866.                                                modify the level of an individual’s
                                                   inaccuracies.                                                                                                 advance payments of the premium tax
                                                                                                           h. Administration of Advance Payments                 credit or cost-sharing reductions. By
                                                      In paragraph (g)(1), we propose that
                                                                                                           of the Premium Tax Credit and Cost-                   implementing, we mean that the issuer
                                                   after the 30-day period specified in
                                                                                                           Sharing Reductions (§ 155.340)                        of the QHP will adjust an enrollee’s net
                                                   paragraph (c) of § 155.335 concludes,
                                                   the Exchange (i) determine an enrollee’s                  Sections 1412(a) and (c) of the                     premium to reflect the advance
                                                   eligibility based on the information                    Affordable Care Act direct the Secretary              payments of the premium tax credit, as
                                                   provided to the enrollee in the                         to notify the Secretary of the Treasury               well as make any changes needed to
                                                                                                           of advance determinations for advance                 ensure that cost-sharing reflects the
                                                     4 ‘‘MaxEnroll Minute: Cutting Red Tape to Keep        payments of the premium tax credit and                appropriate level of reductions.
                                                   Eligible Families Enrolled in Massachusetts’’.          cost-sharing reductions so that the                      In paragraph (b), we propose to codify
                                                   Maximizing Enrollment for Kids. http://                 Secretary of the Treasury may make
                                                   www.maxenroll.org/resource/maxenroll-minute-
                                                                                                                                                                 the reporting rules in sections
                                                   cutting-red-tape-keep-eligible-families-enrolled-       advance payments of such credit or                    1311(d)(4)(I)(ii)–(iii) and 1311(d)(4)(J),
                                                   massachusetts. Also see, ‘‘Stability and Churning in    reductions to the issuer of the QHP                   which support the employer
                                                   Medi-Cal and Healthy Families’’. Fairbrother and        selected by an individual. Sections                   responsibility provisions of the
                                                   Schucter, Child Policy Research Center, Cincinnati      1311(d)(4)(I)–(J) of the Affordable Care
                                                   Children’s Hospital Medical Center. http://
                                                                                                                                                                 Affordable Care Act. Each of the
                                                   www.cincinnatichildrens.org/assets/0/78/1067/           Act also direct that the Exchange report              proposed standards in paragraph (b)
                                                   1395/1833/1835/9811/9813/9819/48b3047a-79ac-            certain information to the Secretary of               relates to information about enrollees
                                                   4e52–9ed8-b7824db1cec3.pdf; ‘‘Instability of Public     the Treasury and to employers to                      who are receiving advance payments of
                                                   Health Insurance Coverage for Children and Their
                                                   Families: Causes, Consequences, and Remedies’’.
                                                                                                           facilitate the employer responsibility                the premium tax credit and cost-sharing
                                                   Summer, Laura, and Mann, Cindy. The                     provisions in the Affordable Care Act. In             reductions.
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   Commonwealth Fund. http://                              § 155.340, we propose to codify these                    In paragraph (b)(1), we propose that
                                                   www.commonwealthfund.org/Content/                       reporting provisions for the Exchange,                when the Exchange determines that an
                                                   Publications/Fund-Reports/2006/Jun/Instability-of-
                                                   Public-Health-Insurance-Coverage-for-Children-
                                                                                                           consistent with our proposal that the                 applicant is eligible to receive advance
                                                   and-Their-Families—Causes—Consequence.aspx),            Exchange conduct eligibility                          payments of the premium tax credit
                                                   and (‘‘Enrollment and Disenrollment in MassHealth       determinations. We also propose that                  based in part on a finding that his or her
                                                   and Commonwealth Care’’. Seifert, Robert, Kirk,         the Exchange simultaneously provide                   employer does not provide minimum
                                                   Garrett, and Oakes, Margaret. Massachusetts
                                                   Medicaid Policy Institute. http://
                                                                                                           relevant information to the issuer of the             essential coverage, or provides
                                                   www.massmedicaid.org/∼/media/MMPI/Files/                QHP selected by an applicant in order                 minimum essential coverage that is
                                                   2010_4_21_disenrollment_mh_cc.pdf.                      to ensure that the issuer can effectuate              unaffordable, as described in 26 CFR


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                          51221

                                                   1.36B–2(c)(3)(v) of the Treasury                        the tax year, identifying information,                managed care organization, a primary
                                                   proposed rule, or does not meet the                     information supporting eligibility                    care case management program, or other
                                                   minimum value standard, as described                    determinations, and any information                   option) and notify the chosen health
                                                   in 26 CFR 1.36B–2(c)(3)(vi) of the                      necessary to determine whether excess                 plan or delivery system of the
                                                   Treasury proposed rule, the Exchange                    advance payments of the premium tax                   individual’s selection.
                                                   will provide this information to the                    credit have been made. The Treasury                      The Exchange may also facilitate
                                                   Secretary of the Treasury. In paragraph                 Secretary is proposing to implement this              delivery system and health plan
                                                   (b)(1), we propose that the Exchange                    provision in 26 CFR 1.36B–5 of the                    selection, including transmitting
                                                   transmit such applicant’s name and                      Treasury proposed rule; to reinforce this             enrollment transactions to health plans,
                                                   Social Security number to HHS, which                    provision and clarify it as a standard for            if applicable, for individuals determined
                                                   will transmit it to the Secretary of the                approval of an Exchange, in paragraph                 eligible for Medicaid or CHIP, if the
                                                   Treasury. This proposed pathway is                      (c), we propose that the Exchange                     agencies administering Medicaid or
                                                   consistent with our proposals                           comply with the Treasury regulation.                  CHIP enter into an agreement
                                                   throughout this part that HHS serve as                                                                        authorizing the Exchange to perform
                                                                                                           i. Coordination With Medicaid, CHIP,                  this function. A greater level of
                                                   an intermediary between the Exchange
                                                                                                           the Basic Health Program, and the Pre-                integration in this area could offer an
                                                   and the various Federal agencies with
                                                                                                           Existing Conditions Insurance Program                 opportunity to reduce administrative
                                                   which the Exchange communicates. We
                                                                                                           (§ 155.345)                                           costs associated with a two-step process
                                                   note that § 155.310(g) specifies that the
                                                   Exchange notify the employer of certain                    In § 155.345, we propose standards for             for applicants who are determined
                                                   information regarding an employee’s                     coordination across the Exchange,                     eligible for Medicaid or CHIP,
                                                   eligibility for advance payments of the                 Medicaid, and CHIP in order to                        particularly because the Exchange will
                                                   premium tax credit.                                     implement a streamlined, simplified                   already have the capacity to allow
                                                      In paragraph (b)(2), we propose that in              system for eligibility determinations and             delivery system selection for
                                                   the event that an enrollee for whom                     enrollment. In this section, we also                  individuals determined eligible to enroll
                                                   advance payments of the premium tax                     propose standards for coordination                    in a QHP. We solicit comments
                                                   credit are made or who is receiving cost-               between the Exchange and the Pre-                     regarding whether and how this
                                                   sharing reductions notifies the Exchange                Existing Conditions Insurance Program                 integration could best work for the
                                                   that he or she has changed employers,                   (PCIP), established pursuant to section               Exchange, Medicaid, and CHIP.
                                                   the Exchange transmit the enrollee’s                    1101 of the Affordable Care Act.                         In paragraph (b)(1), we propose that
                                                   name and Social Security number to                         In paragraph (a) of this section, we               the Exchange perform a ‘‘screen and
                                                   HHS, which will transmit it to Treasury.                propose that the Exchange enter into                  refer’’ function for those applicants who
                                                   We note that such a change may also                     agreements with the Medicaid or CHIP                  may be eligible for Medicaid in a MAGI-
                                                   trigger a redetermination of eligibility                agencies as necessary to fulfill this                 exempt category, as described in section
                                                   during the benefit year for advance                     subpart. Such agreements could support                1902(e)(14)(D) of the Act or an applicant
                                                   payments of the premium tax credit and                  ensuring that Exchange determinations                 that is potentially eligible for Medicaid
                                                   cost-sharing reductions pursuant to                     of eligibility for Medicaid and CHIP are              based on factors not otherwise
                                                   § 155.330.                                              consistent with the methods, standards                considered in this subpart. We propose
                                                      In paragraph (b)(3), we propose that in              and procedures set forth in the                       that the Exchange transmit eligibility
                                                   the event an enrollee for whom advance                  approved State plan and the interpretive              information related to such applications
                                                   payments of the premium tax credit are                  policies and procedures of the State                  to the applicable State agency(ies)
                                                   made or who is receiving cost-sharing                   agency or agencies administering the                  promptly and without undue delay to
                                                   reductions terminates coverage in a                     Medicaid or CHIP programs. We                         complete the remainder of the eligibility
                                                   QHP during a benefit year, the Exchange                 anticipate that Medicaid and CHIP                     determination process.
                                                   transmit his or her name and Social                     eligibility determination activities                     We also note that a State may choose
                                                   Security number and the effective date                  conducted by the Exchange will be                     to establish an eligibility system that
                                                   of the termination of coverage to HHS,                  conducted in cooperation and                          conducts all eligibility determinations
                                                   which will transmit it to Treasury, and                 coordination with the agency or                       for the Exchange, Medicaid, and CHIP,
                                                   transmit his or her name and the                        agencies administering those programs,                including those Medicaid
                                                   effective date of the termination of                    and will utilize the single eligibility               determinations that are based on factors
                                                   coverage to his or her employer.                        system or shared eligibility service                  beyond the MAGI-based income
                                                      Section 36B(f) of the Code directs the               discussed later in this section.                      standard.
                                                   Secretary of the Treasury reconcile the                    In paragraph (d)(1) of § 155.310 of this              We note that section 36B(c)(2)(B)(i) of
                                                   amount of advance payments of the                       subpart, we propose that as part of the               the Code provides that an applicant is
                                                   premium tax credit received by an                       eligibility determination process, the                not eligible for advance payments of the
                                                   individual with the amount allowed                      Exchange determine an applicant                       premium tax credit or cost-sharing
                                                   based on his or her tax return for the tax              eligibility for Medicaid and CHIP, in                 reductions to the extent that he or she
                                                   year that includes the benefit year. In                 accordance with standards described in                is eligible for other minimum essential
                                                   order to support this reconciliation,                   § 155.305 of this subpart, and as                     coverage, including coverage under
                                                   section 1412(c)(1) of the Affordable Care               described in (d)(3), notify the State                 Medicaid. We do not believe this
                                                   Act directs the Secretary to provide                    agency administering Medicaid or CHIP                 provision is intended to exclude an
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                                                   information to the Secretary of the                     and transmit relevant information. Upon               applicant who is otherwise eligible for
                                                   Treasury regarding advance                              making a determination of eligibility for             advance payments of the premium tax
                                                   determinations. In addition, section                    Medicaid or CHIP, the Exchange will                   credit or cost-sharing reductions from
                                                   36B(f)(3) of the Code requires the                      also notify the applicant of the                      receiving such advance payments or
                                                   Exchange to provide information to the                  determination, as described in                        reductions during the time needed for
                                                   Treasury Secretary, including an                        § 155.310(f). The agency administering                Medicaid or CHIP to complete and
                                                   identification of coverage provided,                    Medicaid or CHIP would then provide                   effectuate an eligibility determination,
                                                   QHP premiums, aggregate amounts of                      the individual with his or her choices of             particularly an eligibility determination
                                                   the premium tax credit provided during                  available delivery systems (such as a                 that may involve the review of clinical


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                                                   51222                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   information. As such, in paragraph                      that is submitted to an agency                        eligibility determinations for PCIP
                                                   (b)(2), we propose that the Exchange                    administering Medicaid or CHIP follows                enrollees.
                                                   provide advance payments of the                         the same processes for a complete
                                                                                                                                                                 j. Special Eligibility Standards and
                                                   premium tax credit and cost-sharing                     MAGI-based determination of eligibility
                                                                                                                                                                 Process for Indians (§ 155.350)
                                                   reductions to an individual who is                      for enrollment in a QHP, advance
                                                   found to be otherwise eligible for                      payments of the premium tax credit,                      Section 1402(d) of the Affordable Care
                                                   advance payments of the premium tax                     and cost-sharing reductions, in a                     Act includes special rules regarding
                                                   credit and cost-sharing reductions while                manner identical to that of an                        cost-sharing for Indians. First, section
                                                   the agency administering Medicaid                       application submitted directly to the                 1402(d)(1) of the Affordable Care Act
                                                   completes a more detailed                               Exchange.                                             specifies that a QHP issuer may not
                                                   determination. We note that 26 CFR                         We encourage States to develop                     impose any cost-sharing on an Indian
                                                   1.36B–2(c)(2) of the Treasury proposed                  integrated IT systems across the                      who has household income at or below
                                                   rule, specifies that if an individual                   Exchange, Medicaid, and CHIP, which                   300 percent of the FPL and is enrolled
                                                   receiving advance payments is approved                  could allow States to leverage                        in a QHP at any level of coverage. We
                                                   for government-sponsored minimum                        administrative functions and resources                note that this is different from the cost-
                                                   essential coverage (including Medicaid),                across coverage programs and ensure a                 sharing rules for non-Indians, which
                                                   the individual is treated as eligible for               consistent, seamless experience for                   specifies that an individual be enrolled
                                                   minimum essential coverage no earlier                   consumers. We also expect that States                 in a silver-level plan in order to receive
                                                   than the first day of the first calendar                will utilize a common or shared                       cost-sharing reductions. Second, section
                                                   month after approval; that is, an                       eligibility system or service across the              1402(d)(2) of the Affordable Care Act
                                                   applicant who is referred to the                        Exchange and Medicaid.                                specifies that a QHP may not impose
                                                   Medicaid agency for additional                             Section 1413(c) of the Affordable Care             any cost-sharing on an Indian for
                                                   screening and provided with advance                     Act provides for secure interfaces and                services furnished directly by the Indian
                                                   payments in the interim while he or she                 standards for data matching                           Health Service, an Indian tribe, tribal
                                                   is enrolled in a QHP would be eligible                  arrangements between the Exchange and                 Organization, or Urban Indian
                                                   for the premium tax credit for such                     the agencies administering Medicaid,                  Organization, or through referral under
                                                   months and therefore, would not be                      and CHIP. In paragraph (e)(1), we                     contract health services. This provision
                                                   liable to repay advance payments upon                   propose to codify that the Exchange                   applies regardless of an Indian’s income
                                                   retroactive eligibility for Medicaid for                must utilize a secure, electronic                     or plan level. We note that as defined
                                                   the period of retroactive eligibility.                  interface for the exchange of data for the            in § 155.300(a), for the purposes of this
                                                      In paragraph (c) we propose the                      purpose of determining eligibility,                   section, ‘‘Indian’’ means any individual
                                                   Exchange provide an opportunity for an                  including verifying whether an                        defined in section 4(d) of the Indian
                                                   applicant who is not automatically                      applicant requesting an eligibility                   Self-Determination and Education
                                                   referred to the State Medicaid agency for               determination for advance payments of                 Assistance Act (ISDEAA) (Pub. L. 93–
                                                   an eligibility determination under                      the premium tax credit and cost-sharing               638, 88 Stat. 2203), in accordance with
                                                   paragraph (b) of this section to request                reductions has been determined eligible               section 1402(d)(1) of the Affordable Care
                                                   a full screening of eligibility for                     for Medicaid or CHIP, and other                       Act.
                                                   Medicaid by such agency. Because                        functions specified under this subpart.                  In paragraph (a), we propose to codify
                                                   Medicaid may provide different benefits                 We also note that the standards                       section 1402(d)(1) of the Affordable Care
                                                   or greater protections for certain                      specified in § 155.260 and § 155.270                  Act by requiring the Exchange to
                                                   individuals, those applicants who                       regarding privacy and security apply to               determine an applicant who is an Indian
                                                   believe they may be eligible for such                   any data sharing agreements under this                eligible for cost-sharing reductions if he
                                                   programs should have the opportunity                    section. Lastly, in paragraph (e)(2), we              or she (i) meets the standards of
                                                   to receive a conclusive determination of                propose that the Exchange utilize any                 § 155.305 (related to eligibility for
                                                   eligibility based on all available                      model agreements established by HHS                   enrollment in a QHP) and (ii) has
                                                   eligibility criteria. In paragraph (c)(2),              for the purpose of sharing data as                    household income that does not exceed
                                                   we propose that to the extent that an                   described in this section. We solicit                 300 percent of the FPL. We also propose
                                                   applicant requests such a determination,                comment as to the content of these                    in paragraph (a)(2) to clarify that the
                                                   the Exchange transmit the applicant’s                   model agreements.                                     Exchange may only provide cost-sharing
                                                   information to the State Medicaid                          We propose in paragraph (f),                       reductions to an individual who is an
                                                   agency promptly and without undue                       standards for coordination between the                Indian if he or she is enrolled in a QHP.
                                                   delay. We note that 26 CFR 1.36B–                       Exchange and the Pre-Existing                            In paragraph (b), we propose to codify
                                                   2(c)(2) of the Treasury proposed rule,                  Conditions Insurance Program (PCIP),                  section 1402(d)(2) of the Affordable Care
                                                   discussed above, applies to applicants                  established pursuant to section 1101 of               Act by requiring the Exchange to
                                                   who are determined eligible for                         the Affordable Care Act, which will end               determine an applicant eligible for the
                                                   retroactive Medicaid coverage.                          coverage for its enrolled population                  special cost-sharing rule described in
                                                      In order to implement section 1413 of                effective January 1, 2014. In accordance              that section if he or she is an Indian,
                                                   the Affordable Care Act, in paragraph                   with 45 CFR 152.45, we propose to                     without requiring the applicant to
                                                   (d), we propose that the Exchange work                  develop procedures for the transition of              request an eligibility determination that
                                                   with the agencies administering                         PCIP enrollees to coverage in QHPs                    requires collection or verification of
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                                                   Medicaid and CHIP, to establish                         offered through the Exchanges to ensure               income. This special cost-sharing
                                                   procedures through which an                             that PCIP enrollees do not experience a               reduction rule is not tied to income.
                                                   application that is submitted directly to               lapse in coverage. We solicit comment                    In paragraph (c), we propose that the
                                                   an agency administering Medicaid or                     on additional responsibilities that                   Exchange verify an individual’s
                                                   CHIP initiates an eligibility                           should be assigned to Exchanges as part               attestation that he or she is an Indian for
                                                   determination for enrollment in a QHP,                  of this process, such as providing                    purposes of determining whether he or
                                                   advance payments of the premium tax                     dedicated customer service staff for                  she qualifies for the cost-sharing rules
                                                   credit, and cost-sharing reductions. This               PCIP enrollees or actions that may                    described in paragraphs (a) and (b) of
                                                   is designed to ensure that an application               accelerate or further streamline                      this section. We propose that this


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                         51223

                                                   process consist of two phases. First, in                employers of appeal processes when                    on definitions we propose in other parts
                                                   paragraph (c)(1), we propose that the                   notifying the applicant or employer of                of this proposed rule. The terms
                                                   Exchange use any relevant                               an eligibility determination. As                      ‘‘qualified employer,’’ ‘‘qualified
                                                   documentation verified to support an                    described in § 155.200(d) of the                      employee’’ and ‘‘small employer’’ have
                                                   attestation of citizenship or lawful                    Exchange NPRM, published at 76 FR                     the meaning given to the terms in
                                                   presence in accordance with                             41866, the Exchange will establish a                  § 155.20.
                                                   § 155.315(e) of this subpart. This is                   process to hear individual appeals of                    We recognize that employers may
                                                   designed to ensure that the Exchange                    eligibility determinations. We propose                need to interact with Exchanges for the
                                                   and an application filer will not                       that an individual may appeal any                     express purpose of verifying employees’
                                                   duplicate the effort related to collecting              eligibility determination or                          eligibility for qualifying coverage in an
                                                   and processing documentation if an                      redetermination made by the Exchange                  eligible employer-sponsored plan for
                                                   application filer submitted                             under subpart D, including                            those employees who seek eligibility
                                                   documentation to support an applicant’s                 determinations of eligibility for                     determinations for advance payments of
                                                   attestation to citizenship or lawful                    enrollment in a QHP, advance payments                 the premium tax credit and cost-sharing
                                                   presence that also satisfies the                        of the premium tax credit, and cost-                  reductions, as described in § 155.320(e).
                                                   requirement of this paragraph.                          sharing reductions. We intend to                      We solicit comment earlier in the
                                                      Second, in paragraph (c)(2), we                      propose the details of the individual                 preamble on the timing of the
                                                   propose that the Exchange rely on any                   eligibility appeals processes, including              interactions between employers and
                                                   electronic data sources that are available              standards for the Federal appeals                     Exchanges and how these interactions
                                                   and have been authorized by HHS. HHS                    process, in future rulemaking.                        might be structured.
                                                   will approve electronic data sources                       Pursuant to 1411(f)(2) of the
                                                   based on evidence showing that such                                                                           2. Subpart B—Reserved
                                                                                                           Affordable Care Act, we intend to
                                                   data sources are sufficiently accurate                  propose through future rulemaking                     3. Subpart C—Standards for Qualified
                                                   and offer less administrative complexity                standards for a process through which                 Employers
                                                   than paper verification.                                an employer would be able to appeal a
                                                      If an applicant has not submitted                                                                  Section 1311(b)(1)(B) of the
                                                                                                           determination that an employee of the      Affordable Care Act directs each State
                                                   satisfactory documentation in                           employer is eligible for advance
                                                   accordance with paragraph (c)(1) and                                                               that operates an Exchange to provide for
                                                                                                           payments of the premium tax credit or      the establishment of a Small Business
                                                   the verification process described in                   cost-sharing reductions based in part on
                                                   paragraph (c)(2) is not applicable (such                                                           Health Options Program (SHOP), which
                                                                                                           a finding that the employer did not offer  we describe in subpart H of part 155.
                                                   as because the data are unavailable, do                 qualifying coverage to the employee.
                                                   not contain an applicant’s information,                                                            Subpart C of this part outlines the
                                                   or are not reasonably compatible with                   C. Part 157—Employer Interactions With general provisions for employer
                                                   an applicant’s attestation), we propose                 Exchange and SHOP Participation            participation in SHOPs. To a significant
                                                   that the Exchange follow the standard                                                              extent, the proposal for this subpart
                                                                                                           1. Subpart A—General Provisions            mirrors and complements subpart H of
                                                   inconsistency procedures proposed in
                                                   § 155.315(e) of this subpart. Within                       The Affordable Care Act contains a      part 155, proposed in the Exchange
                                                   these procedures, we propose that the                   number of provisions related to            NPRM, published at 76 FR 41866.
                                                   Exchange follow the standards for                       employers with respect to employee         a. Eligibility of Qualified Employers to
                                                   acceptable documentation provided in                    health coverage. While a number of         Participate in SHOP (§ 157.200)
                                                   section 1903(x)(3)(B)(v) of the Act. We                 them are incorporated into the Code, at
                                                   note that to the extent that the Exchange               sections 4980H and 6056, several are to       In § 157.200, we propose the
                                                   is unable to verify an applicant’s                      be implemented by the Secretary. In        standards for an employer that seeks to
                                                   attestation that he or she is an Indian,                part 157, we propose standards that        offer health coverage to its employees
                                                   and the applicant is otherwise eligible                 address qualified employer                 through a SHOP. In paragraph (a), we
                                                   for enrollment in a QHP or insurance                    participation in SHOP. Also, in the        propose that only qualified employers
                                                   affordability programs, the Exchange                    preamble, we briefly discuss employer      may participate in a SHOP. SHOP
                                                   determine the applicant eligible                        interactions with Exchanges related to     eligibility standards for qualified
                                                   accordingly.                                            the verification of employees’ eligibility employers are proposed in 45 CFR
                                                      We solicit comment on the                            for qualifying coverage in an eligible     155.710.
                                                   availability and usability of electronic                employer-sponsored plan. Subpart A            In paragraph (b), as proposed in 45
                                                   data sources, as well as best practices                 outlines the basis and scope for part 157 CFR 155.710, a qualified employer
                                                   for accepting and verifying                             and defines terms used throughout part     participating in the SHOP may continue
                                                   documentation related to Indian status.                 157.                                       to participate if it ceases to be a small
                                                   We note that this provision is also                                                                employer solely because of an increase
                                                                                                           a. Basis and Scope (§ 157.10)              in the number of employees. In such
                                                   intended to facilitate data sharing
                                                   between tribes and the Exchange for the                    Section 157.10 of subpart A specifies   instances, the employer will continue to
                                                   purposes of this section, to the extent                 the general statutory authority for the    be treated as a qualified employer and
                                                   that tribes are willing and able to engage              proposed regulations and indicates that    may continue its participation until the
                                                   in such data sharing.                                   the scope of part 157 is to establish the  employer either fails to meet the other
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                                                                                                           standards for employers in connection      eligibility criteria or elects to no longer
                                                   k. Right to Appeal (§ 155.355)                          with Exchanges.                            participate in the SHOP.
                                                      Section 1411(f) of the Affordable Care                                                             We note that some small employers
                                                   Act directs the Secretary to establish a                b. Definitions (§ 157.20)                  may have employees in multiple States
                                                   process for a Federal official to hear and                 Under § 157.20, we propose              or SHOP service areas. In 45 CFR
                                                   make decisions on appeals of eligibility                definitions for terms used in part 157     155.710, we proposed to allow multi-
                                                   determinations. Section 1411(e)(4)(C) of                that require clarification. The            State employers flexibility in offering
                                                   the Affordable Care Act also provides                   definitions presented in § 157.20 are      coverage to their employees. While large
                                                   that the Exchange notify applicants and                 taken directly from the statute or based   employers are more likely than small


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                                                   51224                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   employers to have employees in                             In paragraph (d), we propose that a                IV. Summary of Preliminary Regulatory
                                                   multiple States or SHOP jurisdictions, it               qualified employer submit premium                     Impact Analysis
                                                   is important that the health insurance                  payments according to the process                        The summary analysis of benefits and
                                                   options available to small employers                    proposed in 45 CFR 155.705. In                        costs included in this proposed rule is
                                                   participating in the SHOP are not                       paragraph (e), we propose that qualified              drawn from the detailed Preliminary
                                                   limited by the SHOP’s geographic                        employers provide an employee hired                   Regulatory Impact Analysis (PRIA) that
                                                   location. We note that this does not                    outside of the initial enrollment or                  evaluates the impacts of the Exchange
                                                   exempt an employer from the size                        annual open enrollment period with                    proposed rule and the related Patient
                                                   standard of the SHOP. If an employer                    information described in paragraph (c).               Protection and Affordable Care Act;
                                                   has more than 100 employees divided
                                                                                                           As proposed in 45 CFR 155.725(g), the                 Standards Related to Reinsurance, Risk
                                                   among multiple SHOP service areas,
                                                                                                           SHOP will establish a window of time                  Corridors and Risk Adjustment
                                                   such an employer is still a large
                                                                                                           in which a newly hired employee may                   (Premium Stabilization) proposed rule,
                                                   employer.
                                                      Unlike the individual market, in the                 select coverage through a QHP.                        available at http://cciio.cms.gov under
                                                   SHOP there are no statutory residency                      In paragraph (f), we propose that                  ‘‘Regulations and Guidance.’’ This
                                                   standards for either the qualified                                                                            proposed rule proposes the specific
                                                                                                           qualified employers provide the SHOP
                                                   employer or qualified employee.                                                                               standards for the Exchange eligibility
                                                                                                           with information about individuals or
                                                   However, in 45 CFR 155.710, we                                                                                process in order to implement the
                                                                                                           employees whose eligibility to purchase               sections related to eligibility in the
                                                   proposed that small employers either                    coverage through the employer has
                                                   offer employees coverage through the                                                                          Affordable Care Act. As performing
                                                                                                           changed. This notice would apply both                 eligibility determinations is a minimum
                                                   SHOP serving the employer’s principle                   to newly eligible employees and
                                                   business address or offer coverage to an                                                                      function of the Exchange, the costs and
                                                                                                           dependents as well as those no longer                 benefits of these eligibility provisions
                                                   employee through the SHOP serving the                   eligible for coverage. This includes a
                                                   employee’s primary worksite. We                                                                               are inherently tied to the costs and
                                                                                                           COBRA qualifying event, as described                  benefits of the Patient Protection and
                                                   propose parallel standards here to
                                                                                                           in 29 U.S.C. 1163. The SHOP may in                    Affordable Care Act; Establishment of
                                                   coordinate with that proposal.
                                                                                                           turn notify the QHP to process the                    Exchanges and Qualified Health Plans
                                                   b. Employer Participation Process in the                change in enrollment. The employer                    (Exchange) proposed rule.
                                                   SHOP (§ 157.205)                                        retains all notice responsibilities under
                                                                                                           Federal and State law. We suggest that                A. Introduction
                                                      We propose the process for employer
                                                   participation in the SHOP in § 157.205.                 SHOPs direct employers to provide such                   HHS has examined the impact of the
                                                   Paragraph (a), directs an employer to                   notices within thirty (30) days of the                proposed rule under Executive Orders
                                                   adhere to the standards, process, and                   change in eligibility.                                12866 and 13563, the Regulatory
                                                   deadlines set by this part and by the                                                                         Flexibility Act (5 U.S.C. 601–612), and
                                                                                                              In paragraph (g), we propose that a
                                                   SHOP to maintain eligibility as a                                                                             the Unfunded Mandates Reform Act of
                                                                                                           qualified employer adhere to the annual
                                                   qualified employer and have employees                                                                         1995 (Pub. L. 104–4). Executive Orders
                                                                                                           employer election period to change
                                                   enroll in QHPs. As proposed in 45 CFR                                                                         13563 and 12866 direct agencies to
                                                                                                           program participation for the next plan               assess all costs and benefits (both
                                                   155.720, the SHOP will set a uniform                    year. As proposed in 45 CFR 155.725, an
                                                   process and timeline for each employer                                                                        quantitative and qualitative) of available
                                                                                                           employer may begin participating in the               regulatory alternatives and, if regulation
                                                   seeking to become a qualified employer
                                                                                                           SHOP at any time. However, once an                    is necessary, to select regulatory
                                                   through the SHOP.
                                                      In paragraph (b), we propose that a                  employer begins participating, it will                approaches that maximize net benefits
                                                   qualified employer make available                       adhere to an annual employer election                 (including potential economic,
                                                   QHPs to employees in accordance with                    period during which it may change                     environmental, public health and safety
                                                   the process developed by the SHOP                       employee offerings.                                   effects, distributive impacts, and
                                                   pursuant to 45 CFR 155.705.                                In paragraph (h), we propose that if an            equity). Executive Order 13563
                                                      In paragraph (c), we propose that a                  employer remains eligible for coverage                emphasizes the importance of
                                                   qualified employer participating in                     and does not take action during the                   quantifying both costs and benefits, of
                                                   SHOP disseminate information to its                     annual employer election period, such                 reducing costs, of harmonizing rules,
                                                   employees about the methods for                         employer would continue to offer the                  and of promoting flexibility. This rule
                                                   selecting and enrolling in a QHP. To                    same plan, coverage level or plans                    has been designated an ‘‘economically’’
                                                   address the needs of qualified                          selected the previous year for the next               significant rule, under section 3(f)(1) of
                                                   employees seeking assistance, the                       plan year unless the QHP or QHPs are                  Executive Order 12866. Accordingly,
                                                   information disseminated by qualified                   no longer available. We invite                        the rule has been reviewed by the Office
                                                   employers should include at least the                   comments regarding the feasibility of                 of Management and Budget.
                                                   timeframes for enrollment, instructions                 the processes established in this section                The Regulatory Flexibility Act
                                                   for how to access the SHOP Web site                                                                           requires agencies to analyze regulatory
                                                                                                           and the implications for small
                                                   and other tools to compare QHPs, and                                                                          options that would minimize any
                                                                                                           employers and their employees.
                                                   the SHOP toll-free hotline. We propose                                                                        significant impact of a rule on small
                                                   to establish this as a responsibility of                III. Collection of Information                        entities. Using the Small Business
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   the qualified employer because the                      Requirements                                          Administration (SBA) definitions of
                                                   SHOP will not have employee contact                                                                           small entities for agents and brokers,
                                                   information until employees apply for                     We recognize that this proposed rule                providers, QHPs, and employers—HHS
                                                   coverage. However, the SHOP may                         contains items that are subject to the                tentatively concludes that a significant
                                                   assist qualified employers, for example                 Paperwork Reduction Act of 1995. We                   number of firms affected by this
                                                   by providing an easy to use toolkit to                  intend to estimate the burden of                      proposed rule are not small businesses.
                                                   qualified employers explaining the key                  complying with the provisions of this                    Section 202(a) of the Unfunded
                                                   pieces of information to disseminate to                 rule as part of future rulemaking, per the            Mandates Reform Act of 1995 requires
                                                   its employees.                                          Paperwork Reduction Act.                              that agencies prepare a written


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                                     51225

                                                   statement, which includes an                            Secretary of HHS with respect to several               indicate that the impacts are within the
                                                   assessment of anticipated costs and                     sections of the Affordable Care Act that               model’s margin of error.
                                                   benefits, before proposing ‘‘any rule that              create new law and amend existing law
                                                                                                                                                                  Benefits in Response to the Proposed
                                                   includes any Federal mandate that may                   regarding Medicaid and CHIP. This
                                                                                                                                                                  Regulation
                                                   result in the expenditure by State, local,              proposed rule also contains standards
                                                   and tribal governments, in the aggregate,               for employers with respect to                             This summary focuses on the effects
                                                   or by the private sector, of $100,000,000               participation in the Small Business                    of implementing the provisions of the
                                                   or more (adjusted annually for inflation)               Health Options Program.                                Affordable Care Act related to
                                                   in any one year.’’ The current threshold                                                                       eligibility. In this section, we provide
                                                                                                           C. Summary of Costs and Benefits                       evidence on the benefits of increased
                                                   after adjustment for inflation is
                                                   approximately $136 million, using the                      This proposed regulation is being                   health insurance coverage and reduced
                                                   most current (2011) Implicit Price                      published to provide the specific                      transaction costs. Simple eligibility
                                                   Deflator for the Gross Domestic                         standards for the Exchange eligibility                 processes will increase take-up of health
                                                   Product.5 HHS does not expect this                      process in order to implement the                      insurance leading to improved health.
                                                   proposed rule to result in one-year                     sections related to eligibility in the                 In a recent study, compared to the
                                                   expenditures that would meet or exceed                  Affordable Care Act. As performing                     uninsured group, the insured received
                                                   this amount.                                            eligibility determinations is a minimum                more hospital care, more outpatient
                                                                                                           function of the Exchange, the costs and                care, had lower medical debt, better self-
                                                   B. Need for This Regulation                             benefits of these eligibility provisions               reported health, and other health related
                                                      A central aim of Title I of the                      are inherently tied to the costs and                   benefits.8 The evaluation concluded that
                                                   Affordable Care Act is to expand access                 benefits of the Establishment of                       for low-income uninsured adults,
                                                   to health insurance coverage through                    Exchanges and Qualified Health Plans                   coverage has the following benefits:
                                                   the establishment of Exchanges. The                     (Exchange) proposed rule. A detailed                      • Significantly higher utilization of
                                                   number of uninsured Americans is                        PRIA, available at http://cciio.cms.gov                preventive care (mammograms,
                                                   rising due to lack affordable insurance,                under ‘‘Regulations and Guidance,’’                    cholesterol monitoring, etc.),
                                                   barriers to insurance for people with                   evaluates the impacts of the Exchange                     • A significant increase in the
                                                   pre-existing conditions, and high prices                proposed rule and the related Premium                  probability of having a regular office or
                                                   due to limited competition and market                   Stabilization proposed rule. This section              clinic for primary care, and
                                                   failures. Millions of people without                    summarizes benefits and costs of this                     • Significantly better self-reported
                                                   health insurance use health care                        proposed rule.                                         health.
                                                   services for which they do not pay,                                                                               In addition, the use of electronic
                                                                                                           Methods of Analysis                                    records among State and Federal
                                                   shifting the uncompensated cost of their
                                                   care to health care providers. Providers                   The detailed PRIA references the                    agencies with information to verify
                                                   pass much of this cost to insurance                     estimates of the CMS Office of the                     eligibility will minimize the transaction
                                                   companies, resulting in higher                          Actuary (OACT) (CMS, April 22, 2010),6                 costs of purchasing health insurance
                                                   premiums that make insurance                            but primarily uses the underlying                      improving market efficiency and
                                                   unaffordable to even more people. The                   assumptions and analysis done by the                   minimizing time cost for enrollees on
                                                   Affordable Care Act includes a number                   Congressional Budget Office (CBO) and                  enrollment.
                                                   of policies to address these problems,                  the staff of the Joint Committee on                    Costs in Response to the Proposed
                                                   including the creating of Affordable                    Taxation. Their modeling effort                        Regulation
                                                   Insurance Exchanges.                                    accounts for all of the interactions
                                                                                                           among the interlocking pieces of the                      To support this new eligibility
                                                      Starting in 2014, individuals and                                                                           structure, States are expected to build
                                                   small businesses will be able to                        Affordable Care Act including its tax
                                                                                                           policies, and estimates premium effects                new or modify existing information
                                                   purchase private health insurance                                                                              technology systems. How each State
                                                   through State-based competitive                         that are important to assessing the
                                                                                                           benefits of the proposed rule. A                       constructs and assembles the
                                                   marketplaces called Affordable                                                                                 components necessary to support its
                                                   Insurance Exchanges, or ‘‘Exchanges.’’                  description of CBO’s methods used to
                                                                                                           estimate budget and enrollment impacts                 Exchange and Medicaid infrastructure
                                                   Exchanges will offer Americans                                                                                 will vary and depend on the level of
                                                   competition, choice, and clout.                         is available.7 The CBO estimates of
                                                                                                           enrollment in Exchanges are not                        maturity of current systems, current
                                                   Insurance companies will compete for                                                                           governance and business models, size,
                                                   business on a level playing field, driving              significantly different than the
                                                                                                           comparable estimate produced by                        and other factors. Administrative costs
                                                   down costs. Consumers will have a                                                                              to support the vision for a streamlined
                                                   choice of health plans to fit their needs.              OACT. Based on our review, we expect
                                                                                                           that the provisions of these proposed                  and coordinated eligibility and
                                                   And Exchanges will give individuals                                                                            enrollment process will also vary for
                                                   and small businesses the same                           rules will not substantially alter CBO’s
                                                                                                           estimates of the budget impact of                      each State depending on the specific
                                                   purchasing clout as big businesses.                                                                            approaches taken regarding the
                                                      This proposed rule provides                          Exchanges or enrollment. The proposed
                                                                                                           provisions are well within the                         integration between programs and its
                                                   standards for the Exchange eligibility                                                                         decision to build a new system or use
                                                   process, in order to implement sections                 parameters used in the CBO modeling of
                                                                                                           the Affordable Care Act and do not                     existing systems; while the Affordable
                                                   1311, 1411, 1412, and 1413 of the
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                                                                           diverge from assumptions embedded in                   Care Act requires a high level of
                                                   Affordable Care Act. Further, it supports                                                                      integration, States have the option to go
                                                   and complements rulemaking                              the CBO model. Our review and
                                                                                                           analysis of the proposed provisions                    beyond the requirements of the Act. We
                                                   conducted by the Secretary of the                                                                              also believe that overall administrative
                                                   Treasury with respect to section 36B of                                                                        costs may increase in the short term as
                                                                                                             6 Foster, Richard ‘‘Estimated Financial Effects of
                                                   the Code, as added by section 1401(a) of                the Patient Protection and Affordable Care Act as
                                                   the Affordable Care Act, and by the                     Amended ‘‘April 2011. CMS’’.                             8 Finkelstein, A. et al., (2011). The Oregon Health
                                                                                                             7 Congressional Budget Office. (2007) ‘‘CBO’s        Insurance Experiment: Evidence from the First
                                                    5 http://research.stlouisfed.org/fred2/data/           Health Insurance Simulation Model: A Technical         Year,’’ National Bureau of Economic Research
                                                   GDPDEF.txt. Accessed on 7/26/2011.                      Description.’’ October.                                Working Paper Series, 17190.



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                                                   51226                  Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   States build information technology                          support the Exchange are funded wholly                   Exchange startup. States’ initial costs to
                                                   systems; however, in the long-term                           through State Exchange Planning and                      the creation of Exchanges will be
                                                   States will see savings through the use                      Establishment Grants. Costs for                          funded by these grants. Eligibility
                                                   of more efficient systems.                                   information technology infrastructure                    determination is a minimum function of
                                                     As noted in the preamble, we believe                       that will also support Medicaid must be                  the Exchange, therefore the Exchange
                                                   the approach we are taking to                                allocated to Medicaid, but are eligible                  costs related to develop the
                                                   supporting the verification of applicant                     for a 90 percent Federal matching rate                   infrastructure for this function these
                                                   information with SSA, IRS, and DHS                           to assist in development.9                               eligibility provisions are covered by
                                                   reduces administrative complexity and
                                                                                                                Summary of Costs and Benefits                            these grant outlays.
                                                   associated costs. Administrative costs
                                                   incurred in the development of                                 CBO estimated program payments and
                                                   information technology infrastructure to                     receipts for outlays related to grants for
                                                       TABLE 1—ESTIMATED OUTLAYS FOR THE AFFORDABLE INSURANCE EXCHANGES FY 2012–FY 2016, IN BILLIONS OF
                                                                                                  DOLLARS
                                                                                            Year                                                  2012            2013            2014             2015             2016

                                                   Grant Authority for Exchange Start up 10 ................................................       0.6             0.8             0.4              0.2               0.0
                                                     Source: Congressional Budget Office. (2011). Cost Estimate of H.R. 1213 A bill to repeal mandatory funding provided to states in the Patient
                                                   Protection and Affordable Care Act to establish American Health Benefit Exchanges. April 27, 2011. http://www.cbo.gov/ftpdocs/121xx/doc12158/
                                                   hr1213.pdf.


                                                   Regulatory Options Considered                                and increase costs to Exchanges and                      Summary of Costs for Each Option
                                                     In addition to a baseline, HHS has                         Federal agencies.                                           While it would extend a more
                                                   identified two regulatory options for                        (2) Require a Paper-Driven Process for                   streamlined eligibility process to
                                                   this propose rule as required by                             Conducting Eligibility Determinations                    individuals ineligible for a MAGI-based
                                                   Executive Order 12866.                                                                                                eligibility determination, option 1
                                                                                                                   In the proposed rule, to verify                       would require the Exchange to generate
                                                   (1) Require Exchanges To Conduct                             applicant information used to support                    additional resources and funds to be
                                                   Eligibility Determinations for the MAGI-                     an eligibility determination, we                         able to determine eligibility for
                                                   Exempt Population                                            generally propose the Exchange first use                 applicants that may fall into an
                                                      Under the proposed rule, the                              electronic data, where available, prior to               eligibility category that does not use a
                                                   Exchange will determine eligibility for                      requesting paper documentation. Under                    MAGI-based income standard, including
                                                   Medicaid and CHIP for eligibility                            this proposal, individuals will be asked                 one that involves the consideration of
                                                   categories that use a MAGI-based                             to provide only the minimum amount of                    clinical or other income information.
                                                   income standard. In this NPRM, we                            information necessary to complete an                     The paper-driven process outlined
                                                   propose the Exchange perform a ‘‘screen                      eligibility determination, and will only                 under option 2 would ultimately
                                                   and refer’’ function for those applicants                    be required to submit paper if electronic                increase the amount of time it would
                                                   who may be eligible for Medicaid in a                        data cannot be used to complete the                      take for an individual to receive health
                                                   category that does not use a MAGI-based                      verification process.                                    coverage, would reduce the number of
                                                   income standard. For these applicants,                          We believe using technology to                        States likely to operate an Exchange due
                                                   we propose that the Exchange transmit                        minimize burden on individuals and                       to increased administrative costs, and
                                                   eligibility information to the State                         States will help increase access to                      would dissuade individuals from
                                                   Medicaid agency to complete the                              coverage by streamlining the eligibility                 seeking coverage through the Exchange.
                                                   remainder of the eligibility                                 process, and will reduce administrative
                                                   determination process.                                       burden on Exchanges, while increasing                    D. Accounting Statement
                                                      This alternative would require the                        accuracy by relying on trusted data for                    For full documentation and
                                                   Exchange to determine eligibility for                        eligibility.                                             discussion of these estimated costs and
                                                   applicants that may fall into Medicaid                          Under this alternative, the Exchange                  benefits, see the detailed Exchange
                                                   eligibility categories that do not use a                     would require individuals to submit                      PRIA, available at http://cciio.cms.gov
                                                   MAGI-based income standard. It would                         paper documentation to verify                            under ‘‘Regulations and Guidance.’’
                                                   require Exchanges to conduct lengthier                       information necessary for an eligibility                 Since eligibility determination is a
                                                   investigations of these applications than                    determination. This would not only                       minimum function of the Exchange, the
                                                   what is required for eligibility                             increase the amount of burden placed                     costs and benefits of these eligibility
                                                   determinations for applicants eligible                       on individuals to identify and collect                   provisions are included in the costs and
                                                   based on MAGI. It would also require                         this information, which may not be                       benefits of Exchange establishment.
                                                   Exchanges develop the capability to                          readily available to the applicant, but                  Therefore, this accounting statement is
                                                   evaluate this information and other                          would also necessitate additional time                   identical to the one published in the
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   income information not required for                          and resources for Exchanges to accept                    Establishment of Exchanges and
                                                   MAGI-based eligibility determinations.                       and verify the paper documentation                       Qualified Health Plans (Exchange)
                                                   This would require additional resources                      needed for an eligibility determination.                 proposed rule.



                                                     9 Federal Funding for Medicaid Eligibility                   10 OACT estimates that the initial start-up costs      Projections: The Estimated Impact of Reform
                                                   Determination and Enrollment Activities; Final               for Exchanges will be $4.4 billion for 2011–2013         through 2019,’’ Health Affairs, 29, no. 10 (2010):
                                                   Rule, April 19, 2011 [42 CFR part 433 page 21950].           (Sisko, A.M., et al., ‘‘National Health Spending         1933–1941.



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                                                                               Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                                                       51227

                                                                                                                                                                             Primary                           Units discount         Period
                                                                                                      Category                                                                               Year dollar
                                                                                                                                                                             estimate                               rate             covered

                                                   Benefits:

                                                   Annualized Monetized ($millions/year) ............................................................                      Not estimated              2011                7%         2012–2016

                                                                                                                                                                           Not estimated              2011                3%         2012–2016

                                                   Qualitative ........................................................................................................   The Exchanges, combined with other actions being taken to
                                                                                                                                                                          implement the Affordable Care Act, will improve access to health
                                                                                                                                                                          insurance, with numerous positive effects, including earlier
                                                                                                                                                                          treatment and improved morbidity, fewer bankruptcies and
                                                                                                                                                                          decreased use of uncompensated care. The Exchange will also
                                                                                                                                                                          serve as a distribution channel for insurance reducing
                                                                                                                                                                          administrative costs as a part of premiums and providing
                                                                                                                                                                          comparable information on health plans to allow for a more
                                                                                                                                                                          efficient shopping experience.

                                                   Costs:

                                                   Annualized Monetized ($millions/year) ............................................................                                424              2011                7%         2012–2016

                                                                                                                                                                                     410              2011                3%         2012–2016

                                                   Qualitative ........................................................................................................   These costs include grant outlays to States to establish
                                                                                                                                                                          Exchanges.



                                                   V. Regulatory Flexibility Act                                              health insurers would be classified                             examined the health insurance industry
                                                      The Regulatory Flexibility Act (5                                       under the North American Industry                               in depth in the Regulatory Impact
                                                   U.S.C. 601 et seq.) (RFA) requires                                         Classification System (NAICS) Code                              Analysis we prepared for the proposed
                                                   agencies to prepare an initial regulatory                                  524114 (Direct Health and CMS–9989–                             rule on establishment of the Medicare
                                                   flexibility analysis to describe the                                       P 166 Medical Insurance Carriers).                              Advantage program (69 FR 46866,
                                                   impact of the proposed rule on small                                       According to SBA size standards,                                August 3, 2004). In that analysis we
                                                   entities, unless the head of the agency                                    entities with average annual receipts of                        determined that there were few, if any,
                                                   can certify that the rule will not have a                                  $7 million or less would be considered                          insurance firms underwriting
                                                   significant economic impact on a                                           small entities this NAICS code. Health                          comprehensive health insurance
                                                   substantial number of small entities.                                      issuers could possibly be classified in                         policies (in contrast, for example, to
                                                   The Act generally defines a ‘‘small                                        621491 (HMO Medical Centers) and, if                            travel insurance policies or dental
                                                   entity’’ as (1) a proprietary firm meeting                                 this is the case, the SBA size standard                         discount policies) that fell below the
                                                   the size standards of the Small Business                                   would be $10 million or less.                                   size thresholds for ‘‘small’’ business
                                                   Administration (SBA); (2) a not-for-                                                                                                       established by the SBA (currently $7
                                                                                                                              QHP Issuers                                                     million in annual receipts for health
                                                   profit organization that is not dominant
                                                   in its field; or (3) a small government                                       This rule proposes standards on                              insurers, based on North American
                                                   jurisdiction with a population of less                                     Exchanges that address eligibility                              Industry Classification System Code
                                                   than 50,000. States and individuals are                                    determinations for enrollment in a QHP,                         524114).11
                                                   not included in the definition of ‘‘small                                  advance payments of the premium tax                                Additionally, as discussed in the
                                                   entity.’’ HHS uses as its measure of                                       credit, cost-sharing reductions,                                Medical Loss Ratio interim final rule (75
                                                   significant economic impact on a                                           Medicaid, and CHIP. Although these                              FR 74918), the Department used a data
                                                   substantial number of small entities a                                     standards are for Exchanges, they also                          set created from 2009 National
                                                   change in revenues of more than 3 to 5                                     affect health plan issuers that choose to                       Association of Insurance Commissioners
                                                   percent.                                                                   participate in an Exchange. QHP issuers                         (NAIC) Health and Life Blank annual
                                                      As discussed above, this proposed                                       receive information from an Exchange                            financial statement data to develop an
                                                   rule is necessary to implement certain                                     about an enrollee’s category in order to                        updated estimate of the number of small
                                                   standards related to the establishment                                     enable the QHP issuer to provide the                            entities that offer comprehensive major
                                                   and operation of Exchanges as                                              correct level of cost-sharing reductions.                       medical coverage in the individual and
                                                   authorized by the Affordable Care Act.                                     The issuer of the QHP will adjust an                            group markets. For purposes of that
                                                   Specifically, this rule proposes                                           enrollee’s net premium to reflect the                           analysis, the Department used total
                                                   standards for Exchanges related to                                         advance payments of the premium tax                             Accident and Health (A&H) earned
                                                   eligibility determinations for enrollment                                  credit, as well as make any changes                             premiums as a proxy for annual
                                                   in a QHP, advance payments of the                                          required to ensure that cost-sharing                            receipts. The Department estimated that
Emcdonald on DSK2BSOYB1PROD with PROPOSALS3




                                                   premium tax credit, cost-sharing                                           reflects the appropriate level of                               there were 28 small entities with less
                                                   reductions, Medicaid, and CHIP; and                                        reductions. Issuers benefit significantly                       than $7 million in accident and health
                                                   qualified employer participation in                                        from advance payments of the premium                            earned premiums offering individual or
                                                   SHOP.                                                                      tax credit and cost-sharing reductions,                         group comprehensive major medical
                                                      For the purposes of the regulatory                                      but may face some administrative costs                          coverage; however, this estimate may
                                                   flexibility analysis, we expect the                                        relating to receiving enrollee                                     11 ‘‘Table of Size Standards Matched To North
                                                   following types of entities to be affected                                 information from an Exchange.                                   American Industry Classification System Codes,’’
                                                   by this proposed rule—(1) QHP issuers;                                        As discussed in the Web Portal                               effective November 5, 2010, U.S. Small Business
                                                   and (2) employers. We believe that                                         interim final rule (75 FR 24481), HHS                           Administration, available at http://www.sba.gov.



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                                                   51228                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   overstate the actual number of small                    pre-empts State law, or otherwise has                 for the attached proposed regulation in
                                                   health insurance issuers offering such                  Federalism implications. Because States               a meaningful and timely manner.
                                                   coverage, because it does not include                   have flexibility in designing their
                                                                                                                                                                 List of Subjects
                                                   receipts from these companies’ other                    Exchange, State decisions will
                                                   lines of business.                                      ultimately influence both administrative              45 CFR Part 155
                                                                                                           expenses and overall premiums.                          Administrative practice and
                                                   Employers
                                                                                                           However, because States are not                       procedure, Advertising, Brokers,
                                                      The establishment of SHOP in                         required to create an Exchange, these                 Conflict of interest, Consumer
                                                   conjunction with tax incentives for                     costs are not mandatory. For States                   protection, Grant programs—health,
                                                   some employers will provide new                         electing to create an Exchange, the                   Grants administration, Health care,
                                                   opportunities for employers to offer                    initial costs of the creation of the                  Health insurance, Health maintenance
                                                   affordable health insurance to their                    Exchange will be funded by Exchange                   organization (HMO), Health records,
                                                   employees. A detailed discussion of the                 Planning and Establishment Grants.                    Hospitals, Indians, Individuals with
                                                   impact on employers related to the                      After this time, Exchanges will be                    disabilities, Loan programs-health,
                                                   establishment of the SHOP is found in                   financially self-sustaining with revenue              Organization and functions
                                                   the PRIA, available at http://                          sources left to the discretion of the                 (Government agencies), Medicaid,
                                                   cciio.cms.gov under ‘‘Regulations and                   State. In the Department’s view, while                Public assistance programs, Reporting
                                                   Guidance.’’                                             this proposed rule does not impose
                                                      Subpart D of part 157 proposes                                                                             and recordkeeping requirements, Safety,
                                                                                                           substantial direct on State and local
                                                   standards that address qualified                                                                              State and local governments, Technical
                                                                                                           governments, it has Federalism
                                                   employer participation in SHOP. This                                                                          assistance, Women, and Youth.
                                                                                                           implications due to direct effects on the
                                                   rule proposes standards for employers                   distribution of power and                             45 CFR Part 157
                                                   that choose to participate in a SHOP.                   responsibilities among the State and                    Employee benefit plans, Health
                                                   The SHOP is limited by statute to                       Federal governments relating to                       insurance, Health maintenance
                                                   employers with at least one but not                     determining standards relating to health              organization (HMO), Health records,
                                                   more than 100 employees. For this                       insurance coverage (that is, for QHPs)                Hospitals, Indians, Individuals with
                                                   reason, we expect that many employers                   that is offered in the individual and                 disabilities, Organization and functions
                                                   would meet the SBA Standard for small                   small group markets. Each State electing              (Government agencies), Medicaid,
                                                   entities. Since participation in the                    to establish a State-based Exchange                   Public assistance programs, Reporting
                                                   SHOP is voluntary, this proposed rule                   must adopt the Federal standards                      and recordkeeping requirements, Safety,
                                                   does not place any requirements on                      contained in the Affordable Care Act                  State and local governments, Sunshine
                                                   small employers.                                        and in this proposed rule, or have in                 Act, Technical Assistance, Women, and
                                                      We request comment on whether the                    effect a State law or regulation that                 Youth.
                                                   small entities affected by this rule have               implements these Federal standards.
                                                   been fully identified. We also request                                                                          For the reasons set forth in the
                                                                                                           However, the Department anticipates
                                                   comment and information on potential                                                                          preamble, the Department of Health and
                                                                                                           that the Federalism implications (if any)
                                                   costs for these entities and on any                     are substantially mitigated because                   Human Services proposes to amend 45
                                                   alternatives that we should consider.                   States have choices regarding the                     CFR subtitle A, subchapter B, as set
                                                                                                           structure and governance of their                     forth below:
                                                   VI. Unfunded Mandates
                                                                                                           Exchanges. Additionally, the Affordable               SUBTITLE A—DEPARTMENT OF
                                                     Section 202 of the Unfunded                           Care Act does not require States to                   HEALTH AND HUMAN SERVICES
                                                   Mandates Reform Act of 1995 (UMRA)                      establish an Exchange; but if a State
                                                   requires that agencies assess anticipated                                                                     SUBCHAPTER B—REQUIREMENTS
                                                                                                           elects not to establish an Exchange or                RELATING TO HEALTH CARE ACCESS
                                                   costs and benefits and take certain other               the State’s Exchange is not approved,
                                                   actions before issuing proposed rule                    HHS must establish and facilitate an                  PART 155—EXCHANGE
                                                   (and subsequent final rule) that includes               Exchange in that State. Additionally,                 ESTABLISHMENT STANDARDS AND
                                                   any Federal mandate that may result in                  States will have the opportunity to                   OTHER RELATED STANDARDS
                                                   expenditures in any one year by State,                  participate in State Partnership                      UNDER THE AFFORDABLE CARE ACT
                                                   local, or tribal governments, in the                    Exchanges.
                                                   aggregate, or by the private sector, of                    In compliance with the requirement                    1. Part 155, as proposed to be added
                                                   $100 million in 1995 dollars, updated                   of Executive Order 13132 that agencies                at 76 FR 13564, March 14, 2011 is
                                                   annually for inflation. In 2011, that                   examine closely any policies that may                 amended by adding subpart D to read as
                                                   threshold is approximately $136                         have Federalism implications or limit                 follows:
                                                   million. Because States are not required                the policymaking discretion of the                    Subpart D—Exchange Functions in the
                                                   to set up an Exchange, and because                      States, the Department has engaged in                 Individual Market: Eligibility Determinations
                                                   grants are available for funding of the                 efforts to consult with and work                      for Exchange Participation and Insurance
                                                   establishment of an Exchange by a State,                cooperatively with affected States,                   Affordability Programs
                                                   we anticipate that this proposed rule                   including participating in conference                 Sec.
                                                   would not impose costs above that $136                  calls with and attending conferences of               155.300 Definitions and general standards
                                                   million UMRA threshold on State, local,                 the National Association of Insurance                      for eligibility determinations.
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                                                   or tribal governments.                                  Commissioners, and consulting with                    155.305 Eligibility standards.
                                                                                                           State insurance officials on an                       155.310 Eligibility determination process.
                                                   VII. Federalism                                         individual basis.                                     155.315 Verification process related to
                                                     Executive Order 13132 establishes                        Pursuant to the requirements set forth                  eligibility to enroll in a QHP through the
                                                                                                                                                                      Exchange.
                                                   certain requirements that an agency                     in section 8(a) of Executive Order                    155.320 Verification process related to
                                                   must meet when it promulgates a                         13132, and by the signatures affixed to                    eligibility for insurance affordability
                                                   proposed rule (and subsequent final                     this regulation, the Department certifies                  programs.
                                                   rule) that imposes substantial direct                   that CMS has complied with the                        155.330 Eligibility redetermination during a
                                                   costs on State and local governments,                   requirements of Executive Order 13132                      benefit year.



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                                                   155.335 Annual eligibility redetermination.             Assistance Act (Pub. L. 93–638, 88 Stat.              application filer, or in cases in which an
                                                   155.340 Administration of advance                       2203).                                                individual cannot attest, the attestation
                                                       payments of the premium tax credit and                 Insurance affordability programs                   of a parent, caretaker, or someone acting
                                                       cost-sharing reductions.                            means advance payments of the                         responsibly on behalf of such an
                                                   155.345 Coordination with Medicaid, CHIP,
                                                                                                           premium tax credit, cost-sharing                      individual.
                                                       the Basic Health Program, and the Pre-
                                                       existing Condition Insurance Program.               reductions, Medicaid, CHIP, and the                     (2) The attestations specified in
                                                   155.350 Special eligibility standards and               Basic Health Program, as applicable, in               § 155.310(d)(2)(ii) and § 155.315(e)(4)(ii)
                                                       process for Indians.                                accordance with 42 CFR 435.4.                         of this subpart must be provided by a
                                                   155.355 Right to appeal.                                   Minimum value, in connection with                  primary taxpayer.
                                                                                                           an eligible employer-sponsored plan,
                                                   Subpart D—Exchange Functions in the                     has the meaning given to the term in                  § 155.305   Eligibility standards.
                                                   Individual Market: Eligibility                          section 36B(c)(2)(C) of the Code.                        (a) Eligibility for enrollment in a QHP
                                                   Determinations for Exchange                                Non-citizen means an individual who                through the Exchange. The Exchange
                                                   Participation and Insurance                             is not a citizen or national of the United            must determine an applicant eligible for
                                                   Affordability Programs                                  States, in accordance with section                    enrollment in a QHP through the
                                                                                                           101(a)(3) of the Immigration and                      Exchange if he or she meets the
                                                   § 155.300 Definitions and General                                                                             following requirements:
                                                                                                           Nationality Act.
                                                   Standards for Eligibility Determinations                                                                         (1) Citizenship, status as a national,
                                                                                                              Primary taxpayer. (1) Primary
                                                      (a) Definitions. In addition to those                taxpayer means an individual who                      or lawful presence. Is a citizen or
                                                   definitions proposed in 45 CFR 155.20,                  indicates that he or she expects—                     national of the United States or a non-
                                                   for purposes of this subpart, the                          (i) To file a tax return for the benefit           citizen lawfully present in the United
                                                   following terms have the following                      year, in accordance with 26 CFR                       States, and is reasonably expected to be
                                                   meaning:                                                1.6011–8;                                             a citizen, national, or a non-citizen who
                                                      Adoption taxpayer identification                        (ii) If married (within the meaning of             is lawfully present for the entire period
                                                   number has the same meaning as it does                  26 CFR 1.7703–1), to file a joint tax                 for which enrollment is sought;
                                                   in 26 CFR 301.6109–3(a).                                return for the benefit year;                             (2) Incarceration. Is not incarcerated,
                                                      Applicable Children’s Health                            (iii) That no other taxpayer will be               other than incarceration pending the
                                                   Insurance Program (CHIP) MAGI-based                     able to claim him or her as a tax                     disposition of charges; and
                                                   income standard means the applicable                    dependent for the benefit year; and                      (3) Residency.
                                                   income standard applied under the                          (iv) That he or she expects to claim a                (i) In the case of an individual age 21
                                                   State plan under title XXI of the Act, or               personal exemption deduction under                    and over who is not institutionalized, is
                                                   waiver of such plan, as defined at 42                   section 151 of the Code on his or her tax             capable of indicating intent, and is not
                                                   CFR 457.305(a), and as certified by the                 return for one or more applicants,                    receiving an optional State
                                                   State CHIP Agency pursuant to 42 CFR                    including himself or herself and his or               supplementary payment, intends to
                                                   457.348(d), for determining eligibility                 her spouse.                                           reside in the State within the service
                                                   for child health assistance and                            (2) This term can mean either spouse               area of the Exchange, including without
                                                   enrollment in a separate child health                   within a married couple.                              a fixed address, in which the applicant
                                                   program.                                                   Qualifying coverage in an eligible                 is requesting coverage.
                                                      Applicable Medicaid modified                         employer-sponsored plan means                            (ii) In the case of an individual under
                                                   adjusted gross income (MAGI)-based                      coverage in an eligible employer-                     the age of 21, who is not
                                                   income standard has the same meaning                    sponsored plan that meets the                         institutionalized, is not receiving
                                                   as ‘‘applicable modified adjusted gross                 affordability and minimum value                       assistance pursuant to Title IV–E of the
                                                   income standard,’’ as defined at 42 CFR                 standards specified in 26 CFR 1.36B–                  Social Security Act, is not emancipated,
                                                   435.911(b), applied under the State                     2(c)(3).                                              and is not receiving an optional State
                                                   Medicaid plan or waiver of such plan,                      State CHIP Agency means the agency                 supplementary payment, resides in the
                                                   and as certified by the State Medicaid                  that administers a separate child health              State within the service area of the
                                                   agency pursuant to 42 CFR                               program established by the State under                Exchange in which he or she is
                                                   435.1200(c)(3) for determining                          title XXI of the Act in accordance with               requesting coverage, including with a
                                                   eligibility for Medicaid.                               implementing regulations at 42 CFR                    parent or caretaker or without a fixed
                                                      Application filer means an individual                457.                                                  address.
                                                   who submits an application for health                      State Medicaid Agency means the                       (iii) Other special circumstances. In
                                                   insurance coverage to the Exchange and                  agency established by the State under                 the case of an individual who is not
                                                   responds to inquiries about the                         title XIX of the Act that administers the             described in paragraphs (a)(3)(i) or (ii) of
                                                   application, regardless of whether he or                Medicaid program in accordance with                   this section, the Exchange must apply
                                                   she is seeking health insurance coverage                implementing regulations at 42 CFR                    the residency requirements described in
                                                   for him or herself.                                     parts 430 through 456.                                42 CFR 435.403 with respect to the
                                                      Federal poverty level means the most                    Tax dependent has the same meaning                 service area of the Exchange.
                                                   recently published federal poverty level,               as the term dependent under section                      (iv) Special rule for family members
                                                   updated periodically in the Federal                     152 of the Code.                                      living outside the service area of the
                                                   Register by the Secretary of Health and                    (b) Medicaid and CHIP. In general,                 Exchange of the primary taxpayer. A tax
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                                                   Human Services under the authority of                   references to Medicaid and CHIP                       dependent or spouse who lives outside
                                                   42 U.S.C. 9902(2), as of the first day of               regulations in this subpart refer to those            the service area of the Exchange of the
                                                   the annual open enrollment period for                   regulations as implemented by the State               primary taxpayer may request coverage
                                                   coverage in a qualified health plan                     Medicaid or CHIP agency.                              through either the Exchange that
                                                   through the Exchange, as specified in 45                   (c) Attestation.                                   services the area in which the spouse or
                                                   CFR 155.410.                                               (1) Except as specified in paragraph               tax dependent resides or intends to
                                                      Indian means any individual as                       (c)(2) of this section, for the purposes of           reside, as applicable pursuant to the
                                                   defined in section 4(d) of the Indian                   this subpart, an attestation may be made              standard identified in paragraphs
                                                   Self-Determination and Education                        by the applicant (self-attestation), an               (a)(3)(i), (ii), or (iii) of this section, or the


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                                                   51230                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   Exchange that services the area in which                personal exemption deduction on his or                accordance with the rules specified in
                                                   the primary taxpayer resides or intends                 her tax return for the benefit year,                  26 CFR 1.36B–3.
                                                   to reside, as applicable pursuant to the                including the primary taxpayer and his                   (6) Collection of Social Security
                                                   standard identified in subparagraphs                    or her spouse—                                        numbers. The Exchange must require an
                                                   (a)(3)(i), (ii), or (iii).                                 (A) Meets the requirements for                     application filer to provide the Social
                                                      (b) Eligibility for QHP enrollment                   eligibility for enrollment in a QHP                   Security number of the primary
                                                   periods. The Exchange must determine                    through the Exchange, as specified in                 taxpayer if an application filer attests
                                                   an applicant eligible for an enrollment                 paragraph (a) of this section; and                    that the primary taxpayer has a Social
                                                   period if he or she meets the criteria for                 (B) Is not eligible for minimum                    Security number and filed a tax return
                                                   an enrollment period, as specified in                   essential coverage, in accordance with                for the year for which tax data would be
                                                   § 155.410 and § 155.420 of this part.                   26 CFR 1.36B–2(a)(2).                                 utilized for verification of household
                                                      (c) Eligibility for Medicaid. The                       (2) Special rule for non-citizens                  income and family size.
                                                   Exchange must determine an applicant                    lawfully present who are ineligible for                  (g) Eligibility for cost-sharing
                                                   eligible for Medicaid if he or she meets                Medicaid. The Exchange must                           reductions.
                                                   the citizenship and satisfactory                        determine a primary taxpayer eligible                    (1) The Exchange must determine an
                                                   immigration status requirements of 42                   for advance payments of the premium                   applicant eligible for cost-sharing
                                                   CFR 435.406, the residency                              tax credit if the Exchange determines                 reductions if he or she—
                                                   requirements of 42 CFR 435.403, has a                   that—                                                    (i) Meets the requirements for
                                                   household income, as defined in 42 CFR                     (i) He or she meets the requirements               eligibility for enrollment in a QHP
                                                   435.911(b), that is at or below the                     specified in paragraph (f)(1) of this                 through the Exchange, as specified in
                                                   applicable Medicaid MAGI-based                          section, except for paragraph (f)(1)(i);              paragraph (a) of this section;
                                                   income standard and—                                       (ii) He or she is expected to have a                  (ii) Meets the requirements for
                                                      (1) Is pregnant, as defined in the                   household income, as defined in 26 CFR                advance payments of the premium tax
                                                   Medicaid State Plan pursuant to 42 CFR                  1.36B–1(e), of less than 100 percent of               credit, as specified in paragraph (f) of
                                                   435.4;                                                  the FPL, as specified in 26 CFR 1.36B–                this section; and
                                                      (2) Is under age 19;                                 2(b)(5), for the benefit year for which                  (iii) Has household income for the
                                                      (3) Is a parent or caretaker relative of             coverage is requested; and                            taxable year that does not exceed 250
                                                   a dependent child, as defined in the                       (iii) One or more applicants for whom              percent of the Federal Poverty Level
                                                   Medicaid State plan pursuant to 42 CFR                  the primary taxpayer expects to claim a               (FPL).
                                                   435.4; or                                               personal exemption deduction on his or                   (2) The Exchange may only provide
                                                      (4) Is not described in paragraph                    her tax return for the benefit year,                  cost-sharing reductions to an enrollee
                                                   (b)(1), (b)(2), or (b)(3) of this section, is           including the primary taxpayer and his                who is not an Indian if he or she is
                                                   under age 65 and is not entitled to or                  or her spouse, is a non-citizen who is                enrolled in a silver-level QHP, as
                                                   enrolled for benefits under part A of                   lawfully present and ineligible for                   defined by section 1302(d)(1)(B) of the
                                                   title XVIII of the Social Security Act, or              Medicaid, as specified in 26 CFR 1.36B–               Affordable Care Act, purchased through
                                                   enrolled for benefits under part B of title             2(b)(5)(i), by reason of immigration                  the Exchange.
                                                   XVIII of the Social Security Act.                       status.                                                  (h) Eligibility categories for cost-
                                                      (d) Eligibility for CHIP. The Exchange                  (3) Enrollment required. The                       sharing reductions. The Exchange must
                                                   must determine an applicant eligible for                Exchange may provide advance                          use the following eligibility categories
                                                   CHIP if he or she meets the                             payments of the premium tax credit                    for cost-sharing reductions when
                                                   requirements of 42 CFR 457.310 through                  only on behalf of a primary taxpayer if               making eligibility determinations under
                                                   457.320 and has a household income                      one or more applicants for whom the                   this section—
                                                   within the applicable CHIP MAGI-based                   primary taxpayer attests that he or she                 (1) An individual who has household
                                                   income standard.                                        expects to claim a personal exemption                 income greater than 100 percent of the
                                                      (e) Eligibility for Basic Health                     deduction for the benefit year, including             FPL and less than or equal to 150
                                                   Program. If a Basic Health Program is                   the primary taxpayer and his or her                   percent of the FPL;
                                                   operating in the service area of the                    spouse, is enrolled in a QHP through the                (2) An individual who has household
                                                   Exchange, the Exchange must determine                   Exchange.                                             income greater than 150 percent of the
                                                   an applicant eligible for the Basic                        (4) Compliance with filing                         FPL and less than or equal to 200
                                                   Health Program if he or she meets the                   requirement. The Exchange may not                     percent of the FPL; and
                                                   requirements specified in section                       determine a primary taxpayer eligible                   (3) An individual who has household
                                                   1331(e) of the Affordable Care Act and                  for advance payments of the premium                   income greater than 200 percent of the
                                                   regulations implementing that section.                  tax credit if HHS notifies the Exchange               FPL and less than or equal to 250
                                                      (f) Eligibility for advance payments of              as part of the process described in                   percent of the FPL.
                                                   the premium tax credit.                                 § 155.320(c)(4) of this subpart that
                                                      (1) In general. The Exchange must                    advance payments of the premium tax                   § 155.310   Eligibility determination
                                                   determine a primary taxpayer eligible                   credit were made on behalf of the                     process.
                                                   for advance payments of the premium                     primary taxpayer or his or her spouse                    (a) Application.
                                                   tax credit if the Exchange determines                   for a year for which tax data would be                   (1) The Exchange must accept
                                                   that—                                                   utilized for verification of household                applications from individuals in the
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                                                      (i) He or she is expected to have a                  income and family size and the primary                form and manner proposed in 45 CFR
                                                   household income, as defined in 26 CFR                  taxpayer or his or her spouse did not                 155.405.
                                                   1.36B–1(e), of at least 100 percent but                 comply with the requirement to file a                    (2) Information collection from non-
                                                   not more than 400 percent of the FPL,                   tax return for that year as required by 26            applicants. The Exchange may not
                                                   as specified in 26 CFR 1.36B–2(b)(1), for               CFR 1.6011–8.                                         require an individual who is not seeking
                                                   the benefit year for which coverage is                     (5) Calculation of advance payments                coverage for himself or herself to
                                                   requested; and                                          of the premium tax credit. The                        provide information regarding his or her
                                                      (ii) One or more applicants for whom                 Exchange must calculate advance                       citizenship, status as a national, or
                                                   the primary taxpayer expects to claim a                 payments of the premium tax credit in                 immigration status on any application


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                           51231

                                                   or supplemental form. The Exchange                      reductions in accordance with the dates               Exchange must transmit the applicant’s
                                                   may not require such an individual to                   specified in 45 CFR 155.410(c) and (f),               Social Security number and other
                                                   provide a Social Security number,                       and 45 CFR 155.420(b).                                identifying information to HHS, which
                                                   except as described in § 155.305(f)(6) of                  (f) Notification of eligibility                    will submit it to the Social Security
                                                   this subpart.                                           determination. The Exchange must                      Administration.
                                                      (b) Choice to request determination of               provide timely notice to an applicant of                 (2) Verification with the records of the
                                                   eligibility for insurance affordability                 any eligibility determination made in                 Department of Homeland Security. For
                                                   programs. The Exchange must permit an                   accordance with this subpart.                         an applicant who has documentation
                                                   applicant to decline an eligibility                        (g) Notice of an employee’s eligibility            that can be verified through the
                                                   determination for the programs                          for advance payments of the premium                   Department of Homeland Security and
                                                   described in paragraphs (c) through (g)                 tax credit and cost-sharing reductions to             who attests to lawful presence, or who
                                                   of § 155.305 of this subpart; however,                  an employer. The Exchange must notify                 attests to citizenship and for whom the
                                                   the Exchange may not permit an                          an employer that an employee has been                 Exchange cannot substantiate a claim of
                                                   applicant to decline an eligibility                     determined eligible for advance                       citizenship through the Social Security
                                                   determination for a subset of the                       payments of the premium tax credit or                 Administration, the Exchange must
                                                   programs listed in those paragraphs.                    cost-sharing reductions upon                          transmit information from the
                                                      (c) Timing. The Exchange must accept                 determination that an employee is                     applicant’s documentation and other
                                                   an application and make an eligibility                  eligible for advance payments of the                  identifying information to HHS, which
                                                   determination for an applicant seeking                  premium tax credit or cost-sharing                    will submit necessary information to the
                                                   an eligibility determination at any point               reductions. Such notice must identify                 Department of Homeland Security.
                                                   in time during the year.                                the employee.                                            (3) Inconsistencies and inability to
                                                      (d) Determination of eligibility.                       (h) Duration of eligibility                        verify information. For an applicant
                                                      (1) The Exchange must determine an                   determinations without enrollment. To                 who attests to citizenship, status as a
                                                   applicant’s eligibility in accordance                   the extent that an applicant who is                   national, or lawful presence, and for
                                                   with the standards specified in                         determined eligible for enrollment in a               whom the Exchange cannot verify such
                                                   § 155.305 of this subpart.                              QHP does not select a QHP within his                  attestation through the Social Security
                                                      (2) Special rules relating to advance                or her enrollment period in accordance                Administration or the Department of
                                                   payments of the premium tax credit.                     with subpart E of this part, and seeks a              Homeland Security, the Exchange must
                                                      (i) The Exchange must permit an                      new enrollment period—                                follow the procedures specified in
                                                   enrollee to accept less than the full                      (1) Prior to the date on which he or               paragraph (e) of this section, except that
                                                   amount of advance payments of the                       she would have been redetermined in                   the Exchange must provide the
                                                   premium tax credit for which he or she                  accordance with § 155.335 of this                     applicant with a period of 90 days from
                                                   is determined eligible.                                 subpart had he or she enrolled in a                   the date on which the notice described
                                                      (ii) The Exchange may authorize                      QHP, the Exchange must require the                    in § 155.315(e)(2)(i) of this section is
                                                   advance payments of the premium tax                     applicant to attest as to whether                     received for the application filer to
                                                   credit on behalf of a primary taxpayer                  information affecting his or her                      provide satisfactory documentary
                                                   only if the primary taxpayer first attests              eligibility has changed since his or her              evidence or resolve the inconsistency
                                                   that—                                                   most recent eligibility determination
                                                      (A) He or she will file a tax return for                                                                   with the Social Security Administration
                                                                                                           before determining his or her eligibility             or the Department of Homeland
                                                   the benefit year, in accordance with 26                 for an enrollment period, and must
                                                   CFR 1.6011–8;                                                                                                 Security, as applicable. The date on
                                                                                                           process any changes reported in                       which the notice is received means 5
                                                      (B) If married (within the meaning of                accordance with the procedures
                                                   26 CFR 1.7703–1), he or she will file a                                                                       days after the date on the notice, unless
                                                                                                           specified in § 155.330 of this subpart.               the applicant shows that he or she did
                                                   joint tax return for the benefit year;                     (2) On or after the date on which he
                                                      (C) No other taxpayer will be able to                                                                      not receive the notice within the 5-day
                                                                                                           or she would have been redetermined in                period.
                                                   claim him or her as a tax dependent for                 accordance with § 155.335 of this
                                                   the benefit year; and                                                                                            (c) Verification of residency.
                                                                                                           subpart had he or she enrolled in a                      (1) Except as provided in paragraphs
                                                      (D) He or she will claim a personal                  QHP, the Exchange must apply the
                                                   exemption deduction on his or her tax                                                                         (c)(2) through (c)(4) of this section, the
                                                                                                           procedures specified in § 155.335 of this             Exchange must verify an applicant’s
                                                   return for the applicants identified as                 subpart before determining his or her
                                                   members of his or her family, including                                                                       residency in the service area of the
                                                                                                           eligibility for an enrollment period.                 Exchange by accepting his or her
                                                   the primary taxpayer and his or her
                                                   spouse, in accordance with                              § 155.315 Verification process related to             attestation without further verification.
                                                   § 155.320(c)(3)(i).                                     eligibility for enrollment in a QHP through              (2) If the State Medicaid or CHIP
                                                      (3) Special rule relating to Medicaid                the Exchange.                                         agency operating in the State in which
                                                   and CHIP. To the extent that the                           (a) General requirement. Unless a                  the Exchange operates elects to examine
                                                   Exchange determines an applicant                        request for modification is granted                   electronic data sources for all applicants
                                                   eligible for Medicaid or CHIP, the                      pursuant to paragraph (e) of this section,            to verify residency, the Exchange must
                                                   Exchange must notify the State                          the Exchange must verify or obtain                    proceed in accordance with 42 CFR
                                                   Medicaid or CHIP agency and transmit                    information as provided in this section               435.956(c) and 42 CFR 457.380(c), and
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                                                   relevant information to such agency                     in order to determine that an applicant               the policy of the State Medicaid or CHIP
                                                   promptly and without undue delay.                       is eligible for enrollment in a QHP                   agency.
                                                      (e) Effective dates. Upon making an                  through the Exchange.                                    (3) If information provided by an
                                                   eligibility determination, the Exchange                    (b) Verification of citizenship, status            applicant regarding residency is not
                                                   must implement the eligibility                          as a national, or lawful presence.                    reasonably compatible with other
                                                   determination under this section for                       (1) Verification with records from the             information provided by the individual
                                                   enrollment in a QHP through the                         Social Security Administration. For an                or in the records of the Exchange the
                                                   Exchange, advance payments of the                       applicant who attests to citizenship and              Exchange may examine information in
                                                   premium tax credit, and cost-sharing                    has a Social Security number, the                     data sources.


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                                                      (4) If the information in such data                     (4) During the period described in                 Basic Health Program, if a Basic Health
                                                   sources is not reasonably compatible                    paragraph (e)(2)(ii) of this section,                 Program is operating in the service area
                                                   with the information provided by the                    must—                                                 of the Exchange, described in this
                                                   applicant, the Exchange must follow the                    (i) Proceed with all other elements of             subpart.
                                                   procedures specified in § 155.315(e) of                 eligibility determination using the
                                                   this section. A document that provides                  application filer’s attestation for the               § 155.320 Verification process related to
                                                                                                           applicant, and provide eligibility for                eligibility for insurance affordability
                                                   evidence of immigration status may not                                                                        programs.
                                                   be used alone to determine State                        enrollment in a QHP to the extent that
                                                   residency.                                              an applicant is otherwise qualified; and                 (a) General requirements.
                                                      (d) Verification of incarceration                       (ii) Ensure that advance payments of                  (1) The Exchange must verify
                                                   status. The Exchange must verify an                     the premium tax credit and cost-sharing               information in accordance with this
                                                   applicant’s attestation that he or she                  reductions are provided on behalf of an               section only for an applicant who is
                                                   meets the requirements of                               applicant within this period who is                   requesting an eligibility determination
                                                   § 155.305(a)(2) of this subpart by—                     otherwise qualified for such payments                 for insurance affordability programs in
                                                      (1) Relying on any electronic data                   and reductions, as described in                       accordance with § 155.310(b) of this
                                                   sources that are available to the                       § 155.305 of this subpart, if the primary             subpart.
                                                   Exchange and which have been                            taxpayer attests to the Exchange that he                 (2) Unless a request for modification
                                                   approved by HHS for this purpose,                       or she understands that any advance                   is granted pursuant to § 155.315(e) of
                                                   based on evidence showing that such                     payments of the premium tax credit                    this subpart, the Exchange must verify
                                                   data sources are sufficiently current,                  received are subject to reconciliation.               or obtain information in accordance
                                                   accurate, and offer less administrative                    (5) If, after the period described in              with this section before making an
                                                   complexity than paper verification; or                  paragraph (e)(2)(ii) of this section, the             eligibility determination for insurance
                                                      (2) Except as provided in paragraph                  Exchange remains unable to verify the                 affordability programs, and must use
                                                   (d)(3) of this section, if an approved data             attestation, the Exchange must—                       such information in such determination.
                                                   source is unavailable, accepting his or                    (i) Determine the applicant’s                         (b) Verification of eligibility for
                                                   her attestation without further                         eligibility based on the information                  minimum essential coverage other than
                                                   verification.                                           available from the data sources specified             through an eligible employer-sponsored
                                                      (3) To the extent that an applicant’s                in this subpart, and notify the applicant             plan.
                                                   attestation is not reasonably compatible                of such determination in accordance                      (1) The Exchange must verify whether
                                                   with information from approved data                     with the notice requirements specified                an applicant is eligible for minimum
                                                   sources described in paragraph (d)(1) of                in § 155.310(f) of this subpart, including            essential coverage other than through an
                                                   this section or other information                       notice that the Exchange is unable to                 eligible employer-sponsored plan,
                                                   provided by the applicant or in the                     verify the attestation; and                           Medicaid, CHIP, or the Basic Health
                                                   records of the Exchange, the Exchange                      (ii) Implement the determination                   Program, using information obtained by
                                                   must follow the procedures specified in                 specified in paragraph (e)(5)(i) of this              transmitting identifying information
                                                   § 155.315(e) of this subpart.                           section no earlier than 10 days after and             specified by HHS to HHS.
                                                      (e) Inconsistencies. Except as                       no later than 30 days after the date on                  (2) The Exchange must verify whether
                                                   otherwise specified in this subpart, for                which the notice in paragraph (e)(5)(i) of            an applicant has already been
                                                   an applicant for whom the Exchange                      this section is sent.                                 determined eligible for coverage through
                                                   cannot verify information required to                      (f) Flexibility in information collection          Medicaid, CHIP, or the Basic Health
                                                   determine eligibility for enrollment in a               and verification. HHS may approve an                  Program, if a Basic Health Program is
                                                   QHP, advance payments of the premium                    Exchange Plan in accordance with                      operating in the service area of the
                                                   tax credit, and cost-sharing reductions,                § 155.105(d) or a significant change to               Exchange, within the State or States in
                                                   the Exchange—                                           the Exchange Plan in accordance with                  which the Exchange operates using
                                                      (1) Must make a reasonable effort to                 § 155.105(e) of this part to modify the               information obtained from the agencies
                                                   identify and address the causes of such                 methods to be used for collection of                  administering such programs.
                                                   inconsistency, such as by contacting the                information and verification of                          (c) Verification of household income
                                                   application filer to confirm the accuracy               information as set forth in this subpart,             and family/household size.
                                                   of the information submitted by the                     as well as the specific information                      (1) Data.
                                                   application filer;                                      required to be collected, provided that                  (i) Tax return data.
                                                      (2) If the Exchange is unable to                     HHS finds that such modification would                   (A) For all individuals whose income
                                                   resolve the inconsistency through the                   reduce the administrative costs and                   is counted in calculating a primary
                                                   process described in paragraph (e)(1) of                burdens on individuals while                          taxpayer’s household income, in
                                                   this section, must—                                     maintaining accuracy and minimizing                   accordance with 26 CFR 1.36B–1(e), or
                                                      (i) Notify the applicant of the                      delay, that it would not undermine                    an applicant’s household income, in
                                                   inconsistency; and                                      coordination with Medicaid and CHIP,                  accordance with 42 CFR 435.603(d), and
                                                      (ii) Provide the applicant with a                    and that any applicable requirements                  for whom the Exchange has a Social
                                                   period of 90 days from the date on                      under § 155.260, § 155.270, paragraph                 Security number or an adoption
                                                   which the notice described in paragraph                 (g) of this section, and section 6103 of              taxpayer identification number, the
                                                   (e)(2)(i) of this section is sent to the                the Code with respect to the                          Exchange must request tax return data
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                                                   applicant to either present satisfactory                confidentiality, disclosure,                          regarding MAGI and family size from
                                                   documentary evidence or otherwise                       maintenance, or use of information will               the Secretary of the Treasury by
                                                   resolve the inconsistency.                              be met.                                               transmitting identifying information
                                                      (3) The Exchange may extend the                         (g) Applicant information. The                     specified by HHS to HHS.
                                                   period described in paragraph (e)(3) for                Exchange must not require an applicant                   (B) If the identifying information for
                                                   an applicant if the applicant                           to provide information beyond the                     one or more individuals does not match
                                                   demonstrates that a good faith effort has               minimum necessary to support the                      a tax record on file with the Secretary
                                                   been made to obtain the required                        eligibility and enrollment processes of               of the Treasury that may be disclosed
                                                   documentation during the period.                        the Exchange, Medicaid, CHIP, and the                 pursuant to section 6103(l)(21) of the


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                             51233

                                                   Code and its accompanying regulations,                  further verification, unless the Exchange             MAGI-based income through the
                                                   the Exchange must proceed in                            finds that an application filer’s                     process specified in paragraph (c)(2)(ii)
                                                   accordance with § 155.315(e)(1) of this                 attestation of family size is not                     of this section that is within the
                                                   subpart.                                                reasonably compatible with other                      applicable Medicaid or CHIP MAGI-
                                                      (ii) Data regarding MAGI-based                       information provided by the application               based income standard, the Exchange
                                                   income. For all individuals whose                       filer for the family or in the records of             must accept the application filer’s
                                                   income is counted in calculating a                      the Exchange, in which case the                       attestation for the primary taxpayer’s
                                                   primary taxpayer’s household income,                    Exchange may utilize data obtained                    family without further verification,
                                                   in accordance with 26 CFR 1.36B–1(e),                   through electronic data sources to verify             except as provided in paragraph
                                                   or an applicant’s household income, in                  the attestation. If such data sources are             (c)(3)(iii)(B) of this section.
                                                   accordance with 42 CFR 435.603(d), the                  unavailable or information in such data                  (B) If the Exchange finds that an
                                                   Exchange must request data regarding                    sources is not reasonably compatible                  application filer’s attestation of annual
                                                   MAGI-based income in accordance with                    with the application filer’s attestation,             household income is not reasonably
                                                   42 CFR 435.948(a).                                      the Exchange may request additional                   compatible with other information
                                                      (2) Verification process for Medicaid                documentation to support the                          provided by the application filer or
                                                   and CHIP.                                               attestation within the procedures                     available to the Exchange in accordance
                                                      (i) Household size.                                  specified in § 155.315(e) of this subpart.            with paragraph (c)(1)(ii) of this section,
                                                      (A) The Exchange must require an                        (ii) Basic verification process for                the Exchange may utilize data obtained
                                                   application filer to attest to the                      annual household income.                              through electronic data sources to verify
                                                   individuals that comprise an applicant’s                   (A) The Exchange must compute                      the attestation. If such data sources are
                                                   household for Medicaid and CHIP,                        annual household income for the family                unavailable or information in such data
                                                   within the meaning of 42 CFR                            described in paragraph (c)(3)(i)(A) of                sources is not reasonably compatible
                                                   435.603(f).                                             this section based on the tax return data             with the application filer’s attestation,
                                                      (B) The Exchange must verify the                     described in paragraph (c)(1)(i) of this              the Exchange must request additional
                                                   information in paragraph (c)(2)(i)(A) of                section, and require the application filer            documentation using the procedures
                                                   this section by accepting an application                to validate this information, by attesting            specified in § 155.315(e) of this subpart.
                                                   filer’s attestation without further                     whether it represents an accurate                        (iv) Eligibility for alternate verification
                                                   verification, unless the Exchange finds                 projection of the family’s household                  process for decreases in annual
                                                   that an application filer’s attestation to              income for the benefit year for which                 household income and situations in
                                                   the individuals that comprise an                        coverage is requested.                                which tax return data is unavailable.
                                                   applicant’s household for Medicaid and                     (B) To the extent that the data                    The Exchange must determine a primary
                                                   CHIP is not reasonably compatible with                  described in paragraph (c)(1)(i) of this              taxpayer’s annual household income for
                                                   other information provided by the                       section is unavailable, or an application             advance payments of the premium tax
                                                   application filer for the applicant or in               filer attests that it does not represent an           credit and cost-sharing reductions based
                                                   the records of the Exchange, in which                   accurate projection of the family’s                   on the alternate verification procedures
                                                   case the Exchange may utilize data                      household income for the benefit year                 described in paragraph (c)(3)(v) of this
                                                   obtained through electronic data sources                for which coverage is requested, the                  section, if an application filer attests to
                                                   to verify the attestation. If such data                 Exchange must require the application                 projected annual household income in
                                                   sources are unavailable or information                  filer to attest to the family’s projected             accordance with paragraph (c)(3)(ii)(B)
                                                   in such data sources is not reasonably                  household income for the benefit year                 of this section, the primary taxpayer
                                                   compatible with the application filer’s                 for which coverage is requested and                   does not meet the criteria specified in
                                                   attestation, the Exchange may request                   accept the application filer’s attestation            paragraph (c)(3)(iii) of this section, the
                                                   additional documentation to support the                 without further verification, except as               applicants in the primary taxpayer’s
                                                   attestation within the procedures                       provided in paragraph (c)(3)(ii)(C) of                family have not established MAGI-based
                                                   specified in 45 CFR 435.952.                            this section.                                         income through the process specified in
                                                      (ii) Verification process for MAGI-                     (C) If the Exchange finds that an                  paragraph (c)(2)(ii) of this section that is
                                                   based household income. The Exchange                    application filer’s attestation to the                within the applicable Medicaid or CHIP
                                                   must verify MAGI-based income, within                   family’s projected household income for               MAGI-based income standard, and
                                                   the meaning of 42 CFR 435.603(d), for                   the benefit year for which coverage is                   (A) The Secretary of the Treasury does
                                                   the household described in paragraph                    requested is not reasonably compatible                not have tax return data for the primary
                                                   (c)(2)(i)(A) of this section in accordance              with the information described in                     taxpayer that is at least as recent as the
                                                   with the procedures specified in 42 CFR                 paragraph (c)(3)(ii)(A) of this section,              calendar year two years prior to the
                                                   435.948 and 42 CFR 435.952.                             including as a result of data under                   calendar year for which advance
                                                      (3) Verification process for advance                 paragraph (c)(1)(i) of this section being             payments of the premium tax credit or
                                                   payments of the premium tax credit and                  unavailable, the Exchange must proceed                cost-sharing reductions would be
                                                   cost-sharing reductions.                                in accordance with paragraphs                         effective, including a situation in which
                                                      (i) Family size.                                     (c)(3)(iii), (c)(3)(iv), and (c)(3)(vi) of this       this is as a result of an individual not
                                                      (A) The Exchange must require an                     section, as applicable.                               being required to file;
                                                   application filer to attest to the                         (iii) Verification process for increases              (B) The application filer attests that
                                                   individuals that comprise an applicant’s                in household income.                                  the primary taxpayer’s applicable family
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                                                   family for advance payments of the                         (A) If an application filer attests that           size has changed or is reasonably
                                                   premium tax credit and cost-sharing                     a primary taxpayer’s annual household                 expected to change for the benefit year
                                                   reductions, within the meaning of 26                    income has increased or is reasonably                 for which the applicants in his or her
                                                   CFR 1.36B–1(d).                                         expected to increase from the data                    family are requesting coverage;
                                                      (B) The Exchange must verify an                      described in paragraph (c)(3)(ii)(A) of                  (C) The application filer attests that
                                                   applicant’s family size for advance                     this section to the benefit year for which            the primary taxpayer’s annual
                                                   payments of the premium tax credit and                  the applicant(s) in the primary                       household income has decreased or is
                                                   cost-sharing reductions by accepting an                 taxpayer’s family are requesting                      reasonably expected to decrease from
                                                   application filer’s attestation without                 coverage and have not established                     the data described in paragraph (c)(1)(i)


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                                                   51234                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   of this section by 20 percent or more to                (c)(3)(iv) of this section, the Exchange                 (2) For purposes of determining
                                                   the benefit year for which the applicants               must determine household income for                   eligibility for CHIP, the Exchange must
                                                   in his or her family are requesting                     purposes of advance payments of the                   verify whether an applicant who is not
                                                   coverage; or                                            premium tax credit and cost-sharing                   a citizen or a national meets the
                                                      (D) An applicant in the primary                      reductions based on the information                   requirements of 42 CFR 457.320(d) and
                                                   taxpayer’s family has filed an                          specified in paragraph (c)(3)(ii)(A) of               section 2107(e)(1)(J) of the Social
                                                   application for unemployment benefits.                  this section.                                         Security Act, in accordance with the
                                                      (v) Alternate verification process for                  (4) The Exchange must provide                      State Child Health Plan.
                                                   decreases in annual household income                    education and assistance to an
                                                   and situations in which tax return data                 application filer regarding the process               § 155.330 Eligibility redetermination during
                                                   is unavailable. If a primary taxpayer                   specified in this paragraph.                          a benefit year.
                                                   qualifies for an alternate verification                    (d) Verification related to enrollment                (a) General requirement. The
                                                   process based on the requirements                       in an eligible employer-sponsored plan.               Exchange must redetermine the
                                                   specified in paragraph (c)(3)(iv) of this                  (1) Except as provided in paragraph                eligibility of an enrollee in a QHP
                                                   section, the Exchange must attempt to                   (d)(2) of this section, the Exchange must             through the Exchange during the benefit
                                                   verify the application filer’s attestation              verify whether an applicant requesting                year if it receives and verifies new
                                                   of projected annual household income                    an eligibility determination for advance              information reported by an enrollee or
                                                   for the primary taxpayer by—                            payments of the premium tax credit or                 identifies updated information through
                                                      (A) Using annualized data from the                   cost-sharing reductions is enrolled in an             the data matching described in
                                                   MAGI-based income sources specified                     eligible employer-sponsored plan by                   paragraph (c) of this section.
                                                   in paragraph (c)(1)(ii) of this section;                accepting his or her attestation without                 (b) Requirement for individuals to
                                                      (B) Using other electronic data                      further verification.                                 report changes. The Exchange must—
                                                   sources that have been approved by                         (2) If the Exchange finds that an                     (1) Require an enrollee to report
                                                   HHS, based on evidence showing that                     applicant’s attestation of enrollment in              changes with respect to the eligibility
                                                   such data sources are sufficiently                      an eligible employer-sponsored plan is                standards specified in § 155.305 of this
                                                   accurate and offer less administrative                  not reasonably compatible with other                  subpart within 30 days of such change;
                                                   complexity than paper verification; or                  information provided by the applicant                 and
                                                      (C) If electronic data are unavailable               or in the records of the Exchange, the                   (2) Verify any information reported by
                                                   or do not support an application filer’s                Exchange may utilize data obtained                    an enrollee in accordance with the
                                                   attestation, the Exchange must follow                   through data sources to verify the                    processes specified in § 155.315 and
                                                   the procedures specified in § 155.315(e)                attestation. If such data sources are                 § 155.320 of this subpart prior to using
                                                   of this subpart.                                        unavailable or information in such data               such information in an eligibility
                                                      (D) If, following the 90-day period                  sources is not reasonably compatible                  redetermination.
                                                   described in paragraph (c)(3)(v)(C) of                  with the individual’s attestation, the
                                                   this section, an application filer has not                                                                       (c) Requirement for Exchange to
                                                                                                           Exchange may request additional                       periodically examine certain data
                                                   responded to a request for additional                   documentation to support the
                                                   information from the Exchange and the                                                                         sources.
                                                                                                           attestation within the procedures                        (1) The Exchange must periodically
                                                   data sources specified in paragraph                     specified in paragraph (g) of this
                                                   (c)(1) of this section indicate that an                                                                       examine available data sources
                                                                                                           subpart.                                              described in § 155.315(b)(1) and
                                                   applicant in the primary taxpayer’s                        (e) Verification related to eligibility for
                                                   family is eligible for Medicaid or CHIP,                                                                      § 155.320(b) of this subpart to identify
                                                                                                           qualifying coverage in an eligible
                                                   the Exchange must not provide the                                                                             the following changes:
                                                                                                           employer-sponsored plan.
                                                   applicant with eligibility for advance                     (1) The Exchange must require an                      (i) Death; and
                                                   payments of the premium tax credit,                     applicant to attest to his or her                        (ii) Eligibility determinations for
                                                   cost-sharing reductions, Medicaid, CHIP                 eligibility for qualifying coverage in an             Medicare, Medicaid, CHIP, or the Basic
                                                   or the Basic Health Program, if a Basic                 eligible employer-sponsored plan for the              Health Program, if a Basic Health
                                                   Health Program is operating in the                      purposes of eligibility for advance                   Program is operating in the service area
                                                   service area of the Exchange.                           payments of the premium tax credit and                of the Exchange.
                                                      (E) If, at the conclusion of the period              cost-sharing reductions, and to provide                  (2) Flexibility. The Exchange may
                                                   specified in paragraph (c)(3)(v)(C) of this             information identified in section                     make additional efforts to identify and
                                                   section, the Exchange remains unable to                 1411(b)(4) of the Affordable Care Act.                act on changes that may affect an
                                                   verify the application filer’s attestation,                (2) The Exchange must verify whether               enrollee’s eligibility for enrollment in a
                                                   the Exchange must determine an                          an applicant is eligible for qualifying               QHP through the Exchange if HHS
                                                   applicant’s eligibility based on the                    coverage in an eligible employer-                     approves an Exchange Plan in
                                                   information described in paragraph                      sponsored plan for the purposes of                    accordance with § 155.105(d) or a
                                                   (c)(3)(ii)(A) of this section, notify the               eligibility for advance payments of the               significant change to the Exchange Plan
                                                   applicant of such determination in                      premium tax credit and cost-sharing                   in accordance with § 155.105(e) of this
                                                   accordance with the notice                              reductions.                                           part to modify the requirements, based
                                                   requirements specified in § 155.310(f) of                  (f) Additional verification related to             on the criteria specified in § 155.315(e)
                                                   this subpart, and implement such                        immigration status for Medicaid and                   of this subpart.
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                                                   determination in accordance with the                    CHIP.                                                    (d) Redetermination and notification
                                                   effective dates specified in                               (1) For purposes of determining                    of eligibility. If the Exchange verifies
                                                   § 155.330(e)(1)–(2) of this subpart.                    eligibility for Medicaid, the Exchange                updated information reported by an
                                                      (vi) Primary taxpayers not meeting                   must verify whether an applicant who is               enrollee or identifies updated
                                                   criteria for use of the alternate                       not a citizen or a national meets the                 information through the data matching
                                                   verification process. For a primary                     requirements of 42 CFR 435.406 and                    described in paragraph (c) of this
                                                   taxpayer who does not qualify for the                   section 1903(v)(4) of the Social Security             section, the Exchange must:
                                                   alternate verification process based on                 Act, in accordance with the Medicaid                     (1) Redetermine the enrollee’s
                                                   the requirements specified in paragraph                 State Plan.                                           eligibility in accordance with the


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                          51235

                                                   standards specified in § 155.305 of this                (c)(1) of this section, including, if                 resulting from a redetermination under
                                                   subpart, and                                            applicable, the amount of any advance                 this section.
                                                      (2) Notify the enrollee regarding the                payments of the premium tax credit and                  (i) Renewal of coverage. If an enrollee
                                                   determination in accordance with the                    level of cost-sharing reductions.                     remains eligible for coverage in a QHP
                                                   requirements specified in § 155.310(f) of                  (d) Changes reported by enrollees.                 upon annual redetermination, such
                                                   this subpart and notify the enrollee’s                  The Exchange must require an enrollee                 enrollee will remain in the QHP
                                                   employer, as applicable, in accordance                  to report any changes with respect to the             selected the previous year unless such
                                                   with the requirements specified in                      information listed in the notice within               enrollee terminates coverage from such
                                                   § 155.310(g) of this subpart.                           30 days from the date of the notice.                  plan, including termination of coverage
                                                      (e) Effective dates.                                    (e) Verification of reported changes.              in connection with enrollment in a
                                                      (1) In general, changes resulting from               The Exchange must verify any                          different QHP, in accordance with 45
                                                   a redetermination under this section are                information reported by an enrollee                   CFR § 155.430.
                                                   effective on the first day of the month                 under paragraph (d) of this section in
                                                   following the date of the notice                                                                              § 155.340 Administration of advance
                                                                                                           accordance with § 155.315 and                         payments of the premium tax credit and
                                                   described in paragraph (d)(2) of this                   § 155.320 of this subpart, including the              cost-sharing reductions.
                                                   section.                                                relevant provisions in those sections
                                                      (2) Subject to the authorization of                                                                          (a) Requirement to provide
                                                                                                           regarding inconsistencies, before using
                                                   HHS, the Exchange may determine a                                                                             information to enable advance
                                                                                                           such information to determine
                                                   reasonable point in a month after which                                                                       payments of the premium tax credit and
                                                                                                           eligibility.
                                                   a change captured through a                                                                                   cost-sharing reductions. In the event
                                                                                                              (f) Response to redetermination
                                                   redetermination will not be effective                                                                         that the Exchange determines that an
                                                                                                           notice.
                                                   until the first day of the month after the                                                                    applicant is eligible for advance
                                                                                                              (1) The Exchange must require an                   payments of the premium tax credit or
                                                   month specified in paragraph (e)(1) of                  enrollee to sign and return the notice
                                                   this section.                                                                                                 cost-sharing reductions or that an
                                                                                                           described in paragraph (c) of this                    enrollee’s eligibility has changed, the
                                                      (3) In the case of a redetermination                 section.
                                                   that results in an enrollee being                                                                             Exchange must, simultaneously and at
                                                                                                              (2) To the extent that an enrollee does            such time and in such manner as HHS
                                                   ineligible to continue his or her                       not sign and return the notice described
                                                   enrollment in a QHP through the                                                                               may specify—
                                                                                                           in paragraph (c) of this section within                 (1) Notify the issuer of the applicable
                                                   Exchange, the Exchange must maintain                    the 30-day period specified in paragraph
                                                   his or her eligibility for enrollment in a                                                                    QHP;
                                                                                                           (d) of this section, the Exchange must                  (2) Transmit eligibility and
                                                   QHP without advance payments of the                     proceed in accordance with the
                                                   premium tax credit and cost-sharing                                                                           enrollment information to HHS
                                                                                                           procedures specified in paragraph (h)(1)              necessary to enable HHS to begin, end,
                                                   reductions, for a full month following                  of this section.
                                                   the month in which the notice described                                                                       or change the individual’s advance
                                                                                                              (g) Redetermination and notification               payments of the premium tax credit or
                                                   in paragraph (d)(2) of this section is                  of eligibility.
                                                   sent.                                                                                                         cost-sharing reductions;
                                                                                                              (1) After the 30-day period specified                (3) Transmit information necessary to
                                                   § 155.335 Annual eligibility                            in paragraph (d) of this section has                  enable the issuer of the QHP to
                                                   redetermination.                                        elapsed, the Exchange must—                           implement, discontinue the
                                                      (a) General requirement. The                            (i) Redetermine the enrollee’s                     implementation, or modify the level of
                                                   Exchange must redetermine the                           eligibility in accordance with the                    an individual’s advance payments of the
                                                   eligibility of an enrollee in a QHP                     standards specified in § 155.305 of this              premium tax credit or cost-sharing
                                                   through the Exchange on an annual                       subpart using the information provided                reductions, as applicable, including:
                                                   basis.                                                  to the individual in the notice specified               (i) The dollar amount of the
                                                      (b) Updated income and family size                   in paragraph (c) of this section, as                  individual’s advance payment; and
                                                   information. In the case of an enrollee                 supplemented with any information                       (ii) The individual’s cost-sharing
                                                   who requests an eligibility                             reported by the enrollee and verified by              reductions eligibility category.
                                                   determination for insurance                             the Exchange pursuant to paragraphs (d)                 (b) Requirement to provide
                                                   affordability programs in accordance                    and (e) of this section;                              information related to employer
                                                   with § 155.310(b) of this subpart, the                     (ii) Notify the enrollee in accordance             responsibility.
                                                   Exchange must request updated tax                       with the requirements specified in                      (1) In the event that the Exchange
                                                   return information and data regarding                   § 155.310(f) of this subpart; and                     determines that an individual is eligible
                                                   MAGI-based income as described in                          (iii) If applicable, notify the enrollee’s         for advance payments of the premium
                                                   paragraph (c)(1) of § 155.320 of this                   employer, in accordance with the                      tax credit or cost-sharing reductions
                                                   subpart for use in the enrollee’s                       requirements specified in § 155.310(g) of             based in part on a finding that an
                                                   eligibility redetermination.                            this subpart.                                         individual’s employer does not provide
                                                      (c) Notice to enrollee. The Exchange                    (2) If an enrollee reports a change                minimum essential coverage, or
                                                   must provide an enrollee with an                        with respect to the information                       provides minimum essential coverage
                                                   annual redetermination notice including                 provided in the notice specified in                   that is unaffordable, as specified in 26
                                                   the following:                                          paragraph (c) of this section that the                CFR 1.36B–2(c)(3)(v), or does not meet
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                                                      (1) The data obtained under paragraph                Exchange has not verified as of the end               the minimum value requirement
                                                   (b) of this section, if applicable; and                 of the 30-day period specified in                     specified in 26 CFR 1.36B–2(c)(3)(vi),
                                                      (2) The data used in the enrollee’s                  paragraph (d) of this section, the                    the Exchange must transmit the
                                                   most recent eligibility determination;                  Exchange must redetermine the                         individual’s name and taxpayer
                                                   and                                                     enrollee’s eligibility after completing               identification number to HHS.
                                                      (3) The enrollee’s projected eligibility             verification.                                           (2) If an enrollee for whom advance
                                                   determination for the following year,                      (h) Effective dates. The rules specified           payments of the premium tax credit are
                                                   after considering any updated                           in § 155.330(e) of this part regarding                made or who is receiving cost-sharing
                                                   information described in paragraph                      effective dates apply to changes                      reductions notifies the Exchange that he


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                                                   51236                Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules

                                                   or she has changed employers, the                       eligibility criteria that are not described             (2) Model agreements. The Exchange
                                                   Exchange must transmit the enrollee’s                   in § 155.305.                                         may utilize any model agreements as
                                                   name and Social Security number to                         (2) If an applicant requests such a                established by HHS for the purpose of
                                                   HHS.                                                    determination, transmit promptly and                  sharing data as described in this section.
                                                      (3) In the event that an individual for              without undue delay the applicant’s                     (f) Transition from the Pre-existing
                                                   whom advance payments of the                            name, other identifying information,                  Condition Insurance Program (PCIP).
                                                   premium tax credit are made or who is                   and all other information provided on                 The Exchange must follow procedures
                                                   receiving cost-sharing reductions                       the application submitted by or on                    established in accordance with 45 CFR
                                                   disenrolls from a QHP through the                       behalf of such applicant to, and                      152.45 to transition PCIP enrollees to
                                                   Exchange during a benefit year, the                     obtained and verified by, the Exchange                the Exchange to ensure that there are no
                                                   Exchange must—                                          to the State Medicaid agency.                         lapses in health coverage.
                                                      (i) Transmit the individual’s name                      (d) Determination of eligibility for
                                                   and Social Security number, and the                     individuals submitting applications                   § 155.350 Special eligibility standards and
                                                   effective date of coverage termination, to              directly to an agency administering                   process for Indians.
                                                   HHS, which will transmit it to the                      Medicaid, CHIP, or the Basic Health                      (a) Eligibility for cost-sharing
                                                   Secretary of the Treasury; and                          Program. The Exchange, in consultation                reductions.
                                                      (ii) Transmit the individual’s name                  with the agencies administering                          (1) The Exchange must determine an
                                                   and the effective date of the termination               Medicaid, CHIP, and the Basic Health                  applicant who is an Indian eligible for
                                                   of coverage to his or her employer.                     Program, if a Basic Health Program is                 cost-sharing reductions if he or she—
                                                      (c) Requirement to provide                           operating in the service area of the
                                                                                                           Exchange, must establish procedures to                   (i) Meets the requirements specified
                                                   information related to reconciliation of                                                                      in § 155.305(a) of this subpart; and
                                                   advance payments of the premium tax                     ensure that an eligibility determination
                                                   credit. The Exchange must comply with                   for enrollment in a QHP, advance                         (ii) Has household income for the
                                                   the requirements specified in section                   payments of the premium tax credit and                taxable year that does not exceed 300
                                                   36B(f)(3) of the Code and 26 CFR 1.36B–                 cost-sharing reductions is performed                  percent of the FPL.
                                                   5 regarding reporting to the IRS and to                 when an application is submitted                         (2) The Exchange may only provide
                                                   taxpayers.                                              directly to an agency administering                   cost-sharing reductions to an individual
                                                                                                           Medicaid, CHIP, or the Basic Health                   who is an Indian if he or she is enrolled
                                                   § 155.345 Coordination with Medicaid,                   Program, if a Basic Health Program is                 in a QHP through the Exchange.
                                                   CHIP, the Basic Health Program, and the                 operating in the service area of the                     (b) Special cost-sharing rule for
                                                   Pre-existing Condition Insurance Program.               Exchange, and the applicant is                        Indians regardless of income. The
                                                      (a) Agreements. The Exchange must                    determined ineligible for such programs               Exchange must determine an applicant
                                                   enter into agreements with Medicaid or                  based on the applicable MAGI. Such                    eligible for the special cost-sharing rule
                                                   CHIP agencies as are necessary to fulfill               procedures must—                                      described in section 1402(d)(2) of the
                                                   the requirements of this subpart.                          (1) Not require the Exchange to                    Affordable Care Act if he or she is an
                                                      (b) Responsibilities related to                      duplicate any eligibility and verification            Indian, without requiring the applicant
                                                   individuals potentially eligible for                    findings already made by the agency                   to request an eligibility determination
                                                   Medicaid based on other information or                  administering Medicaid, CHIP, or the                  for cost-sharing reductions in
                                                   through other coverage groups.                          Basic Health Program, if a Basic Health               accordance with § 155.310(b) of this
                                                      (1) The Exchange must conduct basic                  Program is operating in the service area              subpart in order to qualify for this rule.
                                                   screening for an applicant requesting an                of the Exchange, for enrollment in a                     (c) Verification related to Indian
                                                   eligibility determination for insurance                 QHP through the Exchange, advance                     status. To the extent that an applicant
                                                   affordability programs under                            payments of the premium tax credit, or                attests that he or she is an Indian, the
                                                   § 155.310(b) of this subpart to determine               cost-sharing reductions; and                          Exchange must verify such attestation
                                                   if an applicant is potentially eligible for                (2) Provide for following the same
                                                                                                                                                                 by—
                                                   Medicaid based on factors not otherwise                 eligibility determination processes for
                                                   considered in this subpart, including                   eligibility determinations regardless of                 (1) Utilizing any relevant
                                                   disability, and must transmit to the                    the agency that initially receives an                 documentation verified in accordance
                                                   State Medicaid agency promptly and                      application.                                          with § 155.315(e) of this subpart;
                                                   without undue delay the name of such                       (e) Standards for sharing information                 (2) Relying on any electronic data
                                                   applicant, other identifying information,               between the Exchange and the agencies                 sources that are available to the
                                                   and all other information provided on                   administering Medicaid, CHIP, and the                 Exchange and which have been
                                                   the application submitted by or on                      Basic Health Program.                                 approved by HHS for this purpose,
                                                   behalf of such applicant to, and                           (1) The Exchange must utilize a                    based on evidence showing that such
                                                   obtained and verified by, the Exchange.                 secure electronic interface to exchange               data sources are sufficiently accurate
                                                      (2) If the applicant is otherwise                    data with the agencies administering                  and offer less administrative complexity
                                                   eligible for advance payments of the                    Medicaid, CHIP, and the Basic Health                  than paper verification; or
                                                   premium tax credit and cost-sharing                     Program, if a Basic Health Program is                    (3) To the extent that approved data
                                                   reductions, the Exchange must provide                   operating in the service area of the                  sources are unavailable, an individual is
                                                   the applicant with such advance                         Exchange, for the purpose of                          not represented in available data
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                                                   payments of the premium tax credit or                   determining eligibility, including                    sources, or data sources conflict with an
                                                   cost-sharing reductions until the other                 verification as to whether an applicant               applicant’s attestation, the Exchange
                                                   program notifies the Exchange that the                  for advance payments of the premium                   must follow the procedures specified in
                                                   applicant is eligible for such program.                 tax credit or cost-sharing reductions has             § 155.315(e) of this subpart and verify
                                                      (c) Individuals requesting additional                been determined eligible for Medicaid,                documentation provided by the
                                                   screening. The Exchange must—                           CHIP, or the Basic Health Program as                  applicant in accordance with the
                                                      (1) Provide an opportunity for an                    specified in § 155.320(b)(2) of this                  standards for acceptable documentation
                                                   applicant to request a full determination               subpart and other functions required                  provided in section 1903(x)(3)(B)(v) of
                                                   of eligibility for Medicaid based on                    under this subpart.                                   the Social Security Act.


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                                                                        Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / Proposed Rules                                                51237

                                                   § 155.355    Right to appeal.                             Qualified employee has the meaning                  provide employees hired outside of the
                                                     (a) Individual appeals. The Exchange                  given to the term in § 155.20.                        initial or annual open enrollment period
                                                   must include the notice of the right to                   Qualified employer has the meaning                  with a specified period to seek coverage
                                                   appeal and instructions regarding how                   given to the term in § 156.20.                        in a QHP beginning on the first day of
                                                   to file an appeal in any determination                    Small employer has the meaning                      employment and information about the
                                                   notice issued to the applicant pursuant                 given to the term in § 155.20.                        enrollment process pursuant to 45 CFR
                                                   to § 155.310(f), § 155.330(d), or                                                                             155.725.
                                                   § 155.335(h) of this subpart.                           Subpart B—[Reserved]
                                                                                                                                                                   (f) New employees and changes in
                                                     (b) [Reserved]                                                                                              employee eligibility. Qualified
                                                     2. Part 157 is added as follows:                      Subpart C—Standards for Qualified
                                                                                                           Employers                                             employers participating in the SHOP
                                                   PART 157—EMPLOYER                                                                                             must provide the SHOP with
                                                                                                           § 157.200 Eligibility of qualified employers          information about individuals or
                                                   INTERACTIONS WITH EXCHANGES
                                                                                                           to participate in a SHOP.                             employees whose eligibility status for
                                                   AND SHOP PARTICIPATION
                                                                                                             (a) General requirement. Only a                     coverage purchased through the
                                                   Subpart A—General Provisions                            qualified employer may participate in                 employer in the SHOP has changed,
                                                   Sec.                                                    the SHOP in accordance with 45 CFR                    including:
                                                   157.10 Basis and scope.                                 155.710.
                                                                                                                                                                   (1) Newly eligible individuals and
                                                   157.20 Definitions.                                       (b) Continuing participation for
                                                                                                                                                                 employees; and
                                                   Subpart B—[Reserved]                                    growing small employers. A qualified
                                                                                                           employer may continue to participate in                 (2) Loss of qualified employee status.
                                                   Subpart C—Standards for Qualified                       the SHOP if it ceases to be a small                     (g) Annual employer election period.
                                                   Employers                                               employer pursuant to 45 CFR 155.710.                  Qualified employers must adhere to the
                                                   157.200 Eligibility of qualified employers to             (c) Participation in multiple SHOPs. A              annual employer election period to
                                                       participate in a SHOP.                              qualified employer may participate in
                                                   157.205 Qualified employer participation                                                                      change the program participation for the
                                                                                                           multiple SHOPs pursuant to 45 CFR                     next plan year described in 45 CFR
                                                       process in a SHOP.
                                                                                                           155.710.                                              155.725(c).
                                                    Authority: Title I of the Affordable Care
                                                   Act, Sections 1311, 1312, 1321, 1411, 1412.             § 157.205 Qualified employer participation              (h) Employer participation renewal. If
                                                                                                           process in a SHOP.                                    a qualified employer does not take
                                                   Subpart A—General Provisions                              (a) General requirements. When                      action during the annual employer
                                                                                                           joining the SHOP, a qualified employer                election period, and remains eligible to
                                                   § 157.10    Basis and scope.
                                                                                                           must comply with the requirements,                    continue participating in the SHOP,
                                                      (a) Basis. This part is based on the                 processes, and timelines set forth by this            such qualified employer will, for the
                                                   following sections of title I of the                    part and must remain in compliance for                next plan year, continue to offer the
                                                   Affordable Care Act:                                    the duration of the employer’s                        same plan, coverage level (as defined by
                                                      1311. Affordable choices of health
                                                                                                           participation in the SHOP.                            section 1302(d)(1) of the Affordable Care
                                                   benefits plans.
                                                                                                             (b) Selecting QHPs. During an election              Act), or combination of plans at the
                                                      1312. Consumer Choice.
                                                      1321. State flexibility in operation                 period, a qualified employer may make                 same contribution level as selected
                                                   and enforcement of Exchanges and                        coverage in a QHP available through the               during the previous year, if such options
                                                   related requirements.                                   SHOP in accordance with the processes                 remain available.
                                                      1411. Procedures for determining                     developed by the SHOP pursuant to 45                  (Catalog of Federal Domestic Assistance
                                                   eligibility for Exchange participation,                 CFR 155.705.                                          Program No. 93.773, Medicare—Hospital
                                                   advance payments of the premium tax                       (c) Information dissemination to                    Insurance; and Program No. 93.774,
                                                   credit and cost-sharing reductions, and                 employees. A qualified employer                       Medicare—Supplementary Medical
                                                   individual responsibility exemptions.                   participating in the SHOP must                        Insurance Program)
                                                      1412. Advance determination and                      disseminate information to its qualified                Dated: August 4, 2011.
                                                   payment of the premium tax credit and                   employees about the process to enroll in              Donald M. Berwick,
                                                   cost-sharing reductions.                                a QHP through the SHOP.
                                                                                                             (d) Payment. A qualified employer                   Administrator, Centers for Medicare &
                                                      (b) Scope. This part establishes the                                                                       Medicaid Services.
                                                   requirements for employers in                           must submit any contribution towards
                                                                                                           the premiums of any qualified employee                  Dated: August 9, 2011
                                                   connection with the operation of
                                                                                                           according to the standards and                        Kathleen Sebelius,
                                                   Exchanges.
                                                                                                           processes described in 45 CFR 155.705.                Secretary, Department of Health and Human
                                                   § 157.20    Definitions.                                  (e) Employees hired outside of the                  Services.
                                                     The following definitions apply to                    initial or annual open enrollment                     [FR Doc. 2011–20776 Filed 8–12–11; 8:45 am]
                                                   this part, unless otherwise indicated:                  period. Qualified employers must                      BILLING CODE 4120–01–P
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