Regulation by Q18AsA


									October 31, 2011


Centers for Medicare & Medicaid Services
Department of Health and Human Services
Room 445-G
Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201

Attention: CMS-9974-P

Re: Patient Protection and Affordable Care Act; Exchange Functions in
the Individual Market; Eligibility Determinations; Exchange Standards
for Employers
File Code: CMS-9974-P

To Whom It May Concern:

These comments are submitted in response to the proposed regulations on the
Establishment of Exchanges and Qualified Health Plans. We thank you for
the opportunity to participate in the process of developing regulatory
guidance regarding these critical provisions of the Affordable Care Act
(ACA). As one of the strongest advocates for passage of health reform,
SEIU has a deep interest in the successful implementation of the law.

The Service Employees International Union (“SEIU”) represents 2.1 million
workers advocating to improve their lives and the services they provide.
SEIU is the largest healthcare union with more than 1.1 members in the field,
including nurses, LPNs, doctors, lab technicians, nursing home workers, and
home care workers. As the largest property services union, SEIU represents
225,000 members in the building cleaning and security industries, including
janitors, security officers, superintendents, maintenance workers, window
cleaners, and doormen and women. With more than 1 million local and state
government workers, public school employees, bus drivers, and child care
providers, SEIU is the second largest public services union. Our members
are consumers of healthcare, providers of healthcare and public workers who
help people access healthcare.


Carol Golubock                       Dania Palanker
Director of Policy                   Associate Director of Healthcare Policy
§155.300 Definitions and General Standards for Eligibility Determinations

Section 155.300 defines “qualifying coverage” under an employer-based plan using the
definition from 26 CFR §1.36B-2(c)(3)(v) in the IRS proposed regulation. The IRS proposes
that affordability be based on the cost of self-only coverage when determining if family coverage
is affordable for family members of employees. We believe this interpretation is incorrect.
Because this definition is being incorporated into these proposed rules, we believe it is necessary
for the Department to know that we have proposed an alternate interpretation to the IRS in which
affordability for the employee is based on self-only coverage but affordability for dependents is
based on the family coverage.

Despite the ACA’s emphasis on affordability, expanding access, and minimum essential
coverage, the proposed rule will deny to otherwise eligible low income individuals access to
coverage through a premium tax credit merely because they are offered unaffordable family
coverage by a family member’s employer. This interpretation of the statute will leave millions
of low income individuals without access to affordable coverage. While premium tax credits
were not intended to cause individuals to replace other affordable coverage, there is clear
recognition in the law that not all employer-sponsored plans will be affordable and eligibility for
an employer-sponsored coverage that is not affordable should not prevent individuals from
accessing the credit. In comments submitted to the IRS, we show that 1) there is another
interpretation of the relevant provisions that is true to the wording of the statute; 2) the
interpretation of the law in the proposed rule is less plausible given the language of the law; and
3) our interpretation is not only superior in terms of the wording of the statute but also with its

§155.305 Eligibility Standards

We generally support this provision and HHS’ intent to ensure that the Exchanges, Medicaid,
and CHIP use consistent definitions of state residence.

§155.310 Eligibility Determination Process

155.310(a)(2) Information Collection from Non-Applicants

We strongly support inclusion of paragraph 155.310(a)(2). This provision is consistent both with
the statute, which specifies that people can be required to provide only the minimum information
needed to conduct an eligibility determination, and with the public policy goal of increasing
enrollment of eligible individuals in coverage. In the absence of such a protection, many people

may find the process of applying for coverage unnecessarily intrusive and be discouraged from

155.310(d)(2) Special Rules Relating to Advance Payments of the Premium Tax Credit

We support the provision allowing people to take less than the full premium credit for which
they qualify. This is an important policy to help individuals and family protect against an
unexpected tax liability at the end of the year. However, we recommend that Exchanges and
Navigators be required to play a more active role in educating consumers about the credit and the
risk of reconciliation payments.

155.310(g) Notice of an Employee’s Eligibility for Advance Payments of the Premium Tax
Credit and Cost-Sharing Reductions to an Employer

We understand that employers will need to be notified of how many employees receive premium
tax credits in order to be aware of any liability under the employer responsibility provisions of
4980H. However, we are concerned that §155.310(g) is dangerously broad and could lead to the
unnecessary sharing of personal information with employers as well as exposing workers to
retaliatory action by employers who face responsibility payments.

The proposed rule seems to provide information to employers on all employees receiving
premium tax credits. This is overly broad. Employers should only receive notification if the
receipt of the credit impacts the employer responsibility payment. If an individual receives a
premium tax credit that will not impact the employer’s responsibility payment, perhaps because
the employee works part-time or the employer is covered by the safe harbor provision discussed
in the proposed IRS regulations, then the employer has no need to know the employee is
receiving tax credits. Sharing this information would actually violate the spirit of HIPAA as it
would be sharing information about the employee enrolling a private health insurance plan.

The employer should be provided only with the minimal information required to evaluate
liability for the employer responsibility payments. The employer does not need any information
beyond the minimal information necessary to identify the employee and the fact that the
employee is receiving a tax credit for a qualified health plan. If the employer receives any
additional information such as information about the level of the tax credit, whether the
individual qualifies for cost sharing credits in addition to the premium tax credit, what qualified
health plan the employee enrolls in, any information related to the employee’s family members

including family size, or any information related to the employee’s household income, then this
would be a violation of the employee’s privacy.

The final rule should require that the notice to the employer specify that employers cannot
retaliate against employees receiving subsidies.

§155.315 Verification Process Related to Eligibility for Enrollment in a QHP through the

§155.315(b) Verification of Citizenship, Status as a National or Lawful Presence

The proposed rule requires that Exchanges verify citizenship or lawful presence by transmitting
information to HHS, which would then transmit the information to the Social Security
Administration (SSA) or the Department of Homeland Security (DHS) depending on the
individual’s attestation of citizenship or lawful presence. The rule does not acknowledge the
creation of the electronic service as set forth in the proposed Medicaid rule at §435.949, which
will allow states to verify this information through a federal “hub.” We recommend that HHS
amend the proposed rule to specifically reference the new “hub” as set forth in the Medicaid rule.

§155.315(e) Inconsistencies

This section codifies the processes set forth in section 1411(e)(3) and (4) of the ACA. To provide
further clarity, we suggest that §155.315(e)(1) be amended to include the statutory language that
Exchanges should, in addition to contacting applicants to resolve inconsistencies, address the
possibility that inconsistencies are due to typographical or clerical errors.

We support the provision allowing applicants to extend the 90-day period to resolve
inconsistencies when applicants demonstrate they have made a good faith effort but need
additional time.

§155.315(g) Applicant Information

We support this provision prohibiting Exchanges from requiring that applicants provide
information beyond the minimum necessary to support eligibility and enrollment in any of the
insurance affordability programs. We recommend that HHS establish mechanisms to monitor
Exchanges for compliance with this policy.

§155.320 Verification Process Related to Eligibility for Insurance Affordability Programs

§155.320(c) Verification of Household Income and Family/Household Size

We are concerned that the proposed rule significantly limits the income changes from the most
recent tax return that can be considered in determining the amount of the advance credit and the
level of cost-sharing reductions. The ACA recognizes the need to accommodate changes in
income and circumstances and directs the Secretary of HHS to establish procedures for making
advance determinations of premium credit eligibility and amounts using other information when
there have been changes affecting eligibility.1 In providing examples of what types of income
changes can trigger the use of more recent information to determine eligibility, the statute
provides an example of a decrease in income of more than 20 percent. The statutory language
makes it clear, however, that the Secretary is not limited by the examples and can take into
account “other significant changes in eligibility.” We recommend that HHS use this flexibility
to adopt a threshold lower threshold that 20 percent. The proposed threshold of 20 percent is not
sensitive enough to respond to the needs of low- and moderate-income families. The use of a 20
percent threshold would leave many eligible families without cost sharing reductions which will
not be adjusted during reconciliation. For some families, the increased monthly premium
associated with a lower advance premium tax credit payment could force the family to choose
between health insurance and other necessities, such as food and housing.

In general, we recommend that individuals and families be allowed to report more current
information on income without a percentage or dollar limit being placed on what they may
report, but the exchanges only be required to use the newer information in determining eligibility
and the amount of the credit when there has been a change that either exceeds a specified
threshold or would make a family eligible or ineligible for the credit (for example, when a
decrease in income would make a family ineligible for the premium credit and eligible for
Medicaid instead or put the family over 400 percent of the poverty line). While we are not
making a specific recommendation here on the exact level at which to set the threshold, we note
that it should be sufficiently low so that it is sensitive to people’s needs — i.e., it should be set
well below 20 percent. At the same time, it should not be so low that it would apply to almost
everyone and be overly burdensome to administer. The threshold could be set just as a modest
percentage of income, or as the higher of a modest percentage of income or a flat dollar amount.

    Section 1412(b) of the Affordable Care Act.

§155.320(d) Verification related to enrollment in qualifying coverage in an eligible employer-
sponsored plan

We support this proposed rule which relies on the applicant’s attestation as to whether the
applicant is enrolled in an eligible employer-sponsored plan. In the vast majority of cases,
individuals are aware that they have employer-sponsored coverage. In most instances,
employees are required to pay a premium contribution towards coverage. While there are some
employers who pay the entire contribution, there is still notification of the enrollment through an
open enrollment period as well as insurance cards and other material sent to the enrollee.

§155.320(e) Verification related to eligibility for qualifying coverage in an eligible employer-
sponsored plan

The proposed rule also requires Exchanges to verify this information and the preamble asks for
comments if the Exchange is unable to gain access to information to verify an applicant’s
eligibility for coverage in an eligible employer-sponsored plan. We recommend that the
Exchange accept the applicant’s attestation in this situation. This would be similar to the
proposed rule for whether or not an applicant is enrolled in eligible employer-sponsored
coverage. The rule proposes that the Exchange accept the attestation unless other data is not
reasonably compatible with the attestation.

The preamble suggests that Exchanges would be responsible for determining whether such
coverage is affordable and whether it meets minimum value standards based on other
information sources. We support standard templates for the information needed to make this
determination as suggested in the preamble. The Exchanges should fill these templates with
information provided by the employer as to the employee contribution and minimum value of the
offered coverage. Applicants should not be expected to know the required contribution or
minimum value, but if the information the Exchange has is different than the information the
applicant has about the employer-sponsored plan, then there should be a procedure for the
applicant to bring this inconsistency to the Exchange and enroll if eligible.

§155.330 Eligibility Redetermination During a Benefit Year

§155.330(b) Requirements for Individuals to Report Changes

Paragraph (b)(1) requires that all Exchange enrollees report changes related to the eligibility
standards specified in §155.305 within 30 days of such change. These changes could include,
but are not limited to, changes in residency, immigration status, household income, and
eligibility for employer-sponsored coverage. The proposed rule does not make a distinction
between reporting requirements for those who purchase Exchange coverage on their own, and
those who receive premium credits, nor does it distinguish between changes that would cause a
household to lose eligibility to enroll in Exchange coverage or receive premium credits and those
that would only have a slight impact on the amount of assistance that is received.

We believe this rule is overly broad and would result in unnecessary burdens, particularly for
Exchange enrollees who do not receive premium credits. We recommend that HHS create
separate reporting requirements for factors required to determine eligibility for enrollment in a
QHP in the Exchange, and for the additional factors required to determine eligibility for
premium credits and cost-sharing subsidies.

§155.330(c) Requirement for Exchange to Periodically Examine Certain Data Sources

Paragraph (c)(1) requires Exchanges to periodically examine available data sources to identify
cases in which an individual has died or become eligible for Medicare, Medicaid, CHIP, or Basic
Health. We recommend clarifying this to indicate that this does not direct states to periodically
redetermine eligibility for these programs.

The proposed rule also gives Exchanges the flexibility to “make additional efforts to identify and
act on changes that may affect an enrollee’s eligibility for enrollment in a QHP”. These
additional efforts would have to be approved by HHS part of the Exchange approval process.
The preamble indicates that this flexibility would be granted to states only if HHS finds that the
alternative efforts would reduce state administrative costs and burdens on individuals, and at the
same time maintain accuracy, minimize delay, and promote coordination with other programs.
To ensure that the application of this provision reflects HHS’s intent, we recommend including
this language from the preamble in the final rule.

§155.330(d) Redetermination and Notification of Eligibility

The proposed rule does not explicitly address what would happen in cases where the Exchanges
are unable to verify changes reported by consumers. In these instances, we assume that the
Exchanges would not act upon the new information. We recommend adding a requirement for
Exchanges to send a notice to consumers informing them that the reported changes could not be
verified and therefore, no action is being taken to redetermine eligibility. Such notices should
include information about consumers’ rights to appeal the decision.

§155.330(e) Effective Dates

The proposed rule requires that changes from a redetermination conducted during the benefit
year are effective on the first day of the month following the date of the notice. Such a
redetermination should trigger a special enrollment period. For example, an individual who is
receiving premium credits experiences a decrease in income such that the individual becomes
eligible for a cost-sharing reduction. Alternatively, a family gains a dependent, which changes
their household size. These changes not only result in a change in eligibility for premium credits
and cost-sharing reductions, they also entitle an enrollee to change plans through a special
enrollment period. Consequently, the effective dates for changes that result from a mid-year
redetermination should coincide with the effective dates for coverage through a special
enrollment period.

§155.335 Annual Eligibility Redetermination

We recommend that the annual eligibility redetermination coincides with the annual open
enrollment period. Notices about open enrollment and eligibility redetermination should be
merged to limit the number of notices received. Effective dates of changes due to annual
eligibility redetermination should be the same effective dates as changes made during the open
enrollment period, except for Medicaid eligibility. Medicaid eligibility should occur on the first
day of the month in which the eligibility determination is made. We concur with further
analysis of the annual eligibility redetermination process provided by the Center for Budget and
Policy Priorities.

§155.345 Coordination with Medicaid, CHIP, the Basic Health Program, and the Pre-
Existing Condition Insurance Program

§155.345(b) Responsibilities Related to Individuals Potentially Eligible for Medicaid Based on
Other Information or Through Other Coverage Groups

We support the inclusion of a basic screening of applicants to determine if they are eligible for
Medicaid including individuals eligible on a basis other than modified adjusted gross income
(MAGI). However, the proposed language fails to provide any detail about the basic screening.
We recommend that the final rule require Exchanges to ask a question or set of questions to
determine whether a person is eligible for Medicaid on a non-MAGI basis. We have made a
similar recommendation related to the streamlined application in §435.907(e) of the proposed
regulations on Medicaid Programs; Eligibility Changes Under the Affordable Care Act of 2010.

§155.345(c) Individuals Requesting Additional Screening

HHS should require Exchanges to inform people that they can request a full determination of
Medicaid eligibility without having to resubmit or re-verify information. As with individuals
who are evaluated for full Medicaid eligibility on the basis of the results of a screening,
individuals who simply request a full Medicaid determination should have the opportunity to
enroll in Exchange coverage and receive a tax credit / cost-sharing reduction until their situation
has been fully evaluated.

§155.355 Right to Appeal

We support the requirement that the Exchange include a notice of the right to appeal and how to
appeal in notifications provided to consumers when any determinations regarding eligibility or
the amount of advance payments and cost-sharing subsidies are made. We note that this
provision refers to three separate sections regarding eligibility determinations— the eligibility
determination process at §155.310, eligibility redetermination during the benefit year at
§155.330, and the annual redetermination process at §155.335. The outcome of a determination
under all three of these rules could be a determination of eligibility for Medicaid (or CHIP for
children under 19). Moreover, because a determination of eligibility for advance payments of
premium credits presumes a finding of ineligibility for Medicaid, every decision by the exchange
is effectively a denial of Medicaid benefits. This means that the Exchange appeal process will
have to be coordinated with the Medicaid process and provide all due process protections that are
required under Medicaid.

The preamble states that the details of the individual eligibility appeals process and standards for
federal appeals will be in future rulemaking. We look forward to commenting on these rules, but
note now that these rules should recognize that appeals are inherently governmental and should
not be contracted out particularly because of the interaction with the Medicaid eligibility process
discussed above. Future rule-making on appeals should also require that Exchanges ensure that
notices and information on the right to appeal be provided in an accessible and readable manner
and that it should meet the meaningful access standards for persons with limited English
proficiency and conform to rules ensuring equal access to persons with disabilities.

§157.200 Eligibility of Qualified Employers to Participate in a SHOP

§157.200(a) General Requirements

Multiemployer plans combine the purchasing power of many employers to leverage cost-
efficient, consumer-oriented coverage for employees and retirees. As we noted in our comments
in response to the proposed regulations on Establishment of Exchanges and Qualified Health
Plans, multiemployer plans should be able to play a role in the SHOP exchange. Multiemployer
plans should be allowed to continue playing this role as Exchanges develop by being able to
purchase coverage through the SHOP on behalf of contributing small employers who would
otherwise be eligible to purchase that coverage. Further, because approximately 90 percent of
contributing employers are small employers, multiemployer plans should be allowed to perform
this intermediary function even if some percentage of their contributing employers is large


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