As previously reported on November 13, 2013 and February 20, 2014, the Centers for Medicare and Medicaid Services ("CMS") has attempted to provide guidance as to when it is appropriate for issuers of "qualified health plans" ("QHPs") to accept third parties premium payments on behalf of individuals. On March 19, 2014, CMS reinforced its February 7, 2014 guidance by issuing an Interim Final Rule ("IFR") which requires issuers of QHPs, including stand-alone dental plans ("SADPs"), to accept premium and cost-sharing payments made on behalf of enrollees by the following entities:
- The Ryan White HIV/AIDS Program;
- Other federal and state government programs that provide premium and cost-sharing support for specific individuals; and
- Indian tribes, tribal organizations, and urban Indian organizations.
This new requirement to accept third party payments of premiums from those organizations on the "approved" list is effective March 14, 2014. CMS exercised its authority to waive the notice-and-comment requirements and the 30-day delay in effective date requirement of the Administrative Procedure Act. CMS stated that delaying the effective date of the rule would mean that some people who are eligible to enroll in a QHP but rely on these approved organizations to contribute to the cost of the premium, would not be able to pay for their coverage. It could also mean that the organizations listed in the regulation would not be able to assist individuals who are already enrolled, but do not have the funds to continue to pay their premiums, which could lead to coverage terminations. CMS is concerned that these scenarios could result in people's medical conditions worsening, especially those individuals with HIV/AIDS, and an increase in need for uncompensated care.
The Interim Final Rule also provides that failure to accept these third party payments could subject QHPs to civil monetary penalties of up to $100 per day for each individual who is adversely affected by the QHP's non-compliance. Individuals who are in states with a federally-facilitated exchange or a state-based exchange who are affected by a violation by a QHP or SADP, may be eligible for a federally-facilitated exchange special enrollment period and a hardship exemption. CMS will issue additional guidance clarifying the criteria for this special relief.
CMS used the Interim Final Rule to restate its concern that third party payments of premium and cost-sharing by hospitals, other healthcare providers and other commercial entities could skew the insurance risk pool and create an "unlevel competitive field" in the insurance market and continued to encourage QHPs and SADPs to reject payments by those entities.
Issuers of QHPs and SADPs should quickly review (and revise if necessary) their policies and procedures regarding accepting premium payments from the approved organizations listed above to insure that they are in compliance with the new requirements.