CMS Clarifies SEP and CO-OP Rules

CMS released an interim final rule amending the eligibility criteria for the "permanent move" special enrollment period (SEP), and providing more financing flexibility to Consumer Operated and Oriented Plans (CO-OPs) in an effort to stabilize Marketplaces and encourage continued carrier participation. CMS will now require individuals applying for the "permanent move" SEP to have minimum essential coverage for one or more days in the 60 days prior to their permanent move. Exceptions will be made for certain individuals, including those who were uninsured due to incarceration or those who were in the coverage gap in a state that has not expanded Medicaid. CMS also released separate materials clarifying the six circumstances under which SEPs are now available. CMS's interim final rule also changes the requirements for serving on a CO-OP board, which could allow CO-OPs to attract new sources of financing, and provides additional clarifications on loan repayments and the prohibition of CO-OPs to convert or sell to a for-profit or non-consumer operated entity.

CMS Clarifies Restriction on Marketplace Coverage for Incarcerated Individuals

CMS published an FAQ clarifying that its restriction on incarcerated individuals' enrollment in Marketplace coverage does not apply if an individual: (1) has not been convicted of a crime; (2) has been convicted but is not currently sentenced to confinement in an institution; or (3) has been convicted and is sentenced to a partial, limited or alternative form of confident in which no government entity is required to provide medical care. Marketplace enrollees who are formally sentenced to incarceration have 30 days to report their change in status to the Marketplace and terminate coverage. States that use the HealthCare.gov platform must adhere to the guidelines defined in the FAQ, while State-based Marketplaces have the option to adopt other "reasonable" policies.

Alaska: Moda Health Plan to Withdraw From Individual Market, Leaving One Insurer

Moda Health Plan (MHP) announced it will not sell policies on Alaska's individual market (on or off the Marketplace) for 2017, requiring 14,000 MHP enrollees—more than 60% of the individual market—to select a new insurer during 2017 open enrollment. Premera Blue Cross Blue Shield will be the only remaining insurer in the individual market, according to Alaska's Division of Insurance. MHP briefly withdrew from the individual markets in Alaska and Oregon earlier this year after regulators restricted some of its activities due to concern over the company's financial position. MHP resumed selling plans when those restrictions were lifted after MHP developed a plan to stabilize its financial position.

Iowa: State Sues Federal Government Over CO-OP Collapse

Insurance Commissioner Nick Gerhart is suing the federal government over the liquidation of failed CoOpportunity Health, alleging that the federal government's attempt to recover funds from the CO-OP before other creditors violates federal and State law. The lawsuit also states that the federal government owes CoOpportunity funds from federal risk adjustment programs created under the ACA. CoOpportunity was liquidated in 2015 after mounting financial losses.