On April 9, 2018, the Centers for Medicare & Medicaid Services (CMS) released the Benefit and Payment Parameters final rule for 2019 (2019 Payment Notice) applicable to qualified health plans (QHPs) offered on health insurance exchanges.1 Although the Trump Administration had previously issued regulations and guidance related to the health insurance marketplaces (for example, the market stabilization rule) this is the first time that it has completed the annual payment notice rulemaking cycle, given that that the 2018 payment notice was issued by the Obama Administration. While the focus of the annual payment notice rulemaking cycle is on QHPs offered on exchanges, it often also addresses federal regulations that apply across the health insurance markets, as the 2019 Payment Notice does.
The regulatory changes made in the 2019 Payment Notice reflect the Trump Administration's stated objectives of enhancing flexibility, affordability, program integrity, and market stability, while reducing the regulatory burden of the Affordable Care Act (ACA). Health insurance issuers and state regulators will have to move quickly to respond to the changes in policy, as the 2019 Payment Notice was issued later relative to prior years.
The changes in policy reflected in the 2019 Payment Notice include:
Essential health benefits (EHBs): Under the ACA, non-grandfathered individual and small group market plans, including exchange plans, must cover 10 categories of EHBs. The 2019 Payment Notice gives states increased flexibility to define the items and services that constitute each of these categories of EHBs. Beginning with plan year 2020, CMS is allowing states on an annual basis to pick from three options when setting their EHB-benchmark plans: (1) choose one of the 50 benchmark plans that states used in plan year 2017; (2) replace one or more of the 10 statutorily required EHB categories of items and services under the state's benchmark plan used in plan year 2017 with the same category or categories of items and services from another state's benchmark plan used in plan year 2017; or (3) select an entirely new set of benefits as the state's benchmark plan. These options are subject to two scope-of-benefit requirements. First, a state's benchmark plan must provide benefits that are at least equal to the scope of benefits provided under a typical employer plan. A typical employer plan is defined as one of the state's 10 benchmark plan options in plan year...