By Jeffrey H. Brochin, J.D.
The CMS Center for Consumer Information and Insurance Oversight (CCIIO) has issued guidance for qualified health plans (QHPs) for compliance with section 1303 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), so as to avoid violations of the Hyde Amendment. The bulletin clarifies both the obligations of the QHPs under the ACA as well as the consequences for failure to comply (CCIIO Bulletin, October 6, 2017).
Background. Since its inception, section 1303 of the ACA has applied certain prohibitions, restrictions, and requirements with respect to coverage of certain abortion services by QHPs offered through the individual market exchanges. Section 1303 prohibits the use of certain federal funds to pay for coverage by QHPs of abortions for which payment would not be permitted under the Hyde Amendment. Accordingly, QHP issuers may not use premium tax credits or cost-sharing reductions (CSRs) to pay for such abortion services. In addition, if the QHP includes coverage of such abortion services, issuers must provide notice of such coverage. Section 1303 also requires issuers to charge and collect at least $1 per enrollee per month for coverage of such abortion services, deposit the collected funds into a separate account, maintain the segregation of such funds, and use only such funds to pay for such abortions. Failure to adhere to these requirements could result in decertification or civil monetary penalties.
Hyde Amendment prohibitions. Every year since 1976, Congress has included a provision known as the Hyde Amendment in annual appropriations legislation, which funds the activities and services provided by HHS, including the activities and services provided by CMS. The Hyde Amendment as currently in effect prohibits taxpayer funding for abortion, except for pregnancies that are the result of rape or incest, or if a woman suffers from a life-threatening physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, as certified by a physician. Similarly, section 1303 of the ACA explicitly prohibits issuers from using any portion of premium tax credits or CSR payments, to pay for coverage for abortions that do not fall under a Hyde exception (non-Hyde abortions).
Section 1303 requirements. Section 1303 of the ACA also requires QHP issuers to take specific steps to prevent use of certain federal taxpayer funds for non-Hyde abortion services. First, QHP issuers must provide notice to enrollees if non-Hyde abortions are covered by their QHP. The statute requires that this notice be provided as part of the summary of benefits and coverage explanation at the time of enrollment.QHP issuers may, if they so choose, provide consumers with additional notice. Similarly, the exchanges may provide notice to consumers on whether QHPs provide such coverage at earlier points during the QHP selection process.
Second, QHP issuers must determine the amount of, and collect from enrollees, a separate payment that equals the cost, determined on an average actuarial basis, for covering non-Hyde abortion services.However, section 1303 requires that such payment must be at least $1 per enrollee per month. Where premiums are paid through employee payroll deposit, the statute provides that separate payment must be made by a separate deposit.Finally, pursuant to section 1303(b)(2)(C) of the ACA, QHP issuers must segregate funds for non-Hyde abortion services collected from enrollees into a separate allocation account that is to be used exclusively to pay for non-Hyde abortions. Thus, if an issuer disburses funds for a non- Hyde abortion on behalf of an enrollee, it must draw those funds from the segregated allocation account. The account cannot be used for any other purpose.
GAO Report found non-compliance issues. Despite the clear statutory requirements, compliance with, and enforcement of, section 1303 has been inconsistent. A 2014 GAO Report determined that many QHP issuers are not following the requirements of section 1303 Of the 18 QHP issuers surveyed for the 2014 GAO Report that covered non-Hyde abortion services, four failed to provide notice to enrollees that such abortion services were included in the QHPs they sold, two of the QHP issuers charged less than the statutorily required minimum of $1 per enrollee per month for coverage of non-Hyde abortion services, and seventeen of the eighteen QHP issuers surveyed failed to satisfy the requirement for collecting separate payments.
Latest CMS guidance. In order to address the non-compliance findings, CMS has issued the bulletin as a reminder to QHPs of their obligation to comply with section 1303 of the ACA, as follows:
- Issuers may not seek premium tax credit payments for coverage of non-Hyde abortion services.
- Issuers may not seek reimbursement for CSRs for non-Hyde abortion services.
- Issuers must provide an annual notice in the summary of benefits and coverage that describes whether non-Hyde abortion services are covered by the QHP.
- Issuers must charge and collect no less than $1 per enrollee per month for coverage of non-Hyde abortion services, and deposit such amounts collected into a separate allocation account that is used exclusively to cover non-Hyde abortions. To demonstrate compliance with the requirement to collect a separate payment, issuers should provide enrollees with notice stating that a portion of the total premium amount owed is a separate payment for non-Hyde abortion services (e.g., providing the enrollee with such a notice at the time of enrollment, on a monthly invoice that itemizes the premium charge for coverage of non-Hyde abortion services, or a separate monthly bill for such coverage).
Failure to comply with these requirements could result in civil monetary penalties beginning in the 2018 plan year.
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