Regulations to implement various provisions of the Affordable Care Act (ACA) continue to be issued at a rapid pace. On Friday, the U.S. Department of Health and Human Services (HHS) released a final rule expanding standards set forth in earlier rules and providing additional information on the permanent risk adjustment, transitional reinsurance and temporary risk corridors programs, advance payments of the premium tax credit, cost-sharing reductions, medical loss ratio, and the Small Business Health Options Program (SHOP). The agency also issued a proposed rule governing certain transitional provisions of SHOP, while the U.S. Office of Personnel Management (OPM) issued a proposed rule establishing the Multi-State Plan Program (MSPP) under ACA.

Medical Loss Ratio, Other Programs

The most comprehensive HHS rule issued on Friday spans nearly 500 pages and touches upon a number of ACA provisions, including those related to the medical loss ratio (MLR) requirement. ACA mandates that health insurers, depending on the size of the insurance market, spend between 80 and 85% of premium revenue on reimbursement for clinical services or activities that improve health care quality, or provide a rebate to their enrollees. The law also imposes certain reporting requirements for insurers. Among other things, the new rule extends the annual MLR reporting deadline from June 1 to July 31, 2013, and the rebate disbursement deadline from August 1 to September 30, 2013.

The rule also contains provisions addressing the temporary risk corridors program, which is designed to help health insurance issuers deal with uncertainty in setting premium plan rates. Specifically, the final rule provides technical details on how issuers will account for profits and taxes in their risk corridors calculations.


With respect to the Small Business Health Options Program (SHOP), the rule finalizes several provisions of this program. Notably, the rule explains that the initial plan to allow qualified employers in federally-facilitated (FF) SHOPs to choose a specific level of coverage (bronze, silver, gold, or platinum) and a contribution and then permit employees to choose any qualified health plan (QHP) at that level will not be possible in 2014 because of “operational challenges” pointed out by commenters. The proposed rule issued in conjunction with the final rule contains new target dates for the employee choice options. The rule finalizes a number of other technical details about the SHOP, including methods for employer contributions in an FF-SHOP; linking issuer participation in a federally-facilitated exchange to participation in an FF-SHOP; determining employer size for purposes of SHOP participation; and defining “full-time employee” for the purposes of Exchanges and the SHOPS.

As discussed in a fact sheet, the proposed rule on the SHOP issued along with the final rule sets forth transitional policies for certain operations of the SHOP “to ensure market stability in 2014 and conforming SHOP special enrollment periods to those in the broader group health insurance market.”

Multi-State Plan Program

Section 1334 of ACA directs the OPM to establish the Multi-State Plan Program (MSPP) “to foster competition among plans competing in the individual and small group health insurance markets on the Exchanges.” OPM is directed to contract with private health insurance issuers (one of which must be non-profit) to offer at least two multi-state plans (MSPs) on each of the future health insurance Exchanges in each state. To this end, the proposed OPM rule outlines the process the agency will use to establish and administer the MSPP, and sets forth standards and requirements for MSPs and MSPP issuers.