On August 4, 2020, the Centers for Medicare & Medicaid Services (CMS) announced new guidance (here) stating it will temporarily be exercising enforcement discretion to allow health plan issuers in the individual and small group markets to offer premium reductions for one or more months for 2020 coverage. Details follow.
- Generally, CMS states, health plan issuers are not permitted to reduce premiums that are otherwise due. However, in light of the current COVID-19 pandemic, CMS states it will “adopt a policy of relaxed enforcement” around such prohibitions, which will thereby allow issuers to reduce premiums for enrollees. Specifically, issuers will be able to offer premium credits for 2020 coverage on a temporary basis.
- On p. 2, CMS states that issuers wishing to offer premium credits must receive approval from the applicable regulator (in some cases, CMS). Issuers must also receive permission from any applicable Exchange through which the issuer offers a qualified health plan (QHP). In requesting these credits, issuers must indicate the “fixed percentage by which they intend to provide credits against 2020 premium amounts and the month(s) in 2020 to which these credits would apply.” CMS further states that issuers must apply these credits in a non-discriminatory manner and must be offered on a prospective basis (i.e., not applicable to previous months in 2020). Additional reporting information for the temporary premium credits are on p. 3.
- CMS further states that HealtCare.gov will continue to display plans with their full premium amounts without any reference to premiums that issuers may be offering.
- As for advance premium tax credit (APTC) amounts, CMS states it will use the second lowest cost silver plan premium amount, without the application of any premium credits, in order to calculate the maximum APTC amount.
- Additional guidance for issuers offering premium credits in a state with a state-based exchange (SBE) is available at the bottom of p. 4. In general, CMS states that issuers should following any requirements established by the SBE for reporting planned temporary premium credits.
These flexibilities from CMS come at a time when relief in the individual market may be welcomed, as individuals who remain unable to work may continue to struggle in meeting premium obligations – an outcome helpful both for consumers as well as for limiting the rate of uninsured patients seen by providers.