CMS-10465 MEC Supporting Statement - Part A

Supporting Statement – Part A
Minimum Essential Coverage
(CMS-10465)
A. Background
The Patient Protection and Affordable Care Act, Pub. L. 111-148, was enacted on March 23,
2010 and the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, was
enacted on March 30, 2010 (collectively known as the “Affordable Care Act”). The
Affordable Care Act reorganizes, amends, and adds to the provisions of title XXVII of the
Public Health Service Act (PHS Act) relating to group health plans and health insurance
issuers in the group and individual markets.
Section 1501 of the Affordable Care Act adds section 5000A to the Internal Revenue Code
(IRC), which requires that most individuals maintain minimum essential coverage. IRC
section 5000A(f) designates certain types of coverage minimum essential coverage. In
addition, IRC section 5000A(f)(1)(E) directs the Secretary of Health and Human Services, in
coordination with the Secretary of Treasury, to recognize other health benefits coverage,
such as a state health benefits risk pool, as minimum essential coverage for purposes of their
enrollees satisfying the minimum coverage requirement. The proposed rule titled “Patient
Protection and Affordable Care Act; Exchange Functions: Eligibility for Exemptions;
Miscellaneous Minimum Essential Coverage Provisions” proposes to designate certain types
of existing coverages as minimum essential coverage. Other coverages, not statutorily
designated and not designated as minimum essential coverage in this regulation, may be
recognized as minimum essential coverage if certain substantive and procedural
requirements are met.
B. Justification
1.

Need and Legal Basis
The proposed rule would specifically designate certain types of coverage that have not been
designated in the statute, as minimum essential coverage. In addition, the proposed rule
outlines a process by which other types of coverage could seek to be recognized as minimum
essential coverage. It would require coverage recognized to be minimum essential coverage
to offer substantially the same consumer protections as those enumerated in the Title I of
Affordable Care Act relating to non-grandfathered, individual coverage to ensure consumers
are receiving adequate coverage.
The proposed rule would require sponsors of individual coverage that seek to have such
coverage recognized as minimum essential coverage to adhere to certain procedures. They
would have to submit to HHS electronically the following information: (1) name of the
organization sponsoring the plan; (2) name and title of the individual who is authorized to
make, and makes, this certification on behalf of the organization; (3) address of the
individual named above; (4) phone number of the individual named above; (5) number of
enrollees; (6) eligibility criteria; (7) cost sharing requirements, including deductible and outof-pocket maximum; (8) essential health benefits covered; and (9) a certification that the
plan substantially complies with the provisions of Title I of the Affordable Care Act as
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applicable to non-grandfathered individual health insurance coverage.
The proposed rule also proposes that sponsors whose health coverage are recognized as
minimum essential coverage would have to provide a notice to enrollees informing them that
the plan has been designated minimum essential coverage for the purposes of the individual
coverage requirement. The notice requirement may be satisfied by inserting the model
statement provided in this proposed rule into existing plan documents. Plan documents are
usually reviewed and updated annually before a new plan year begins. Sponsors may insert
the model language in their plan documents at that time at minimal cost. Once the notice is
included in the plan documents the first year, no additional cost will be incurred in future
years. Therefore this notice is not subject to the Paperwork Reduction Act of 1995.
2.

Information Users
CMS will need the information to determine whether the plan sponsored by the requesting
sponsor may be recognized as minimum essential coverage. CMS would maintain a public
list of the types of coverage that have submitted this information and have been determined
by the Secretary to meet the eligibility requirements to be recognized as minimum essential
coverage. Consumers will also need to know that the types of coverage they are enrolled in
are recognized as minimum essential coverage.

3.

Use of Information Technology
Requesting sponsors are expected to submit the information to CMS electronically.

4.

Duplication of Efforts
This is the first time such disclosures have been required, so there is no duplication of
efforts.

5.

Small Businesses
Small businesses are not affected by this collection.

6.

Less Frequent Collection
This information would be provided to CMS at the time of the initial request and if there are
any changes to the coverages at a later date. If sponsors do not submit this information,
CMS will not be able to determine whether these types of coverage may be recognized as
minimum essential coverage. In addition, if consumers are not provided with a notice, they
would not be aware that their types of coverage are recognized as minimum essential
coverage.

7.

Special Circumstances
There are no special circumstances.

8.

Federal Register/Outside Consultation
The 60-day Federal Register notice displayed as part of a notice of proposed rulemaking on
January 30, 2013.
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9.

Payments/Gifts to Respondents
No payments or gifts are associated with these information collection requests (ICRs).

10. Confidentiality
CMS will protect privacy of the information provided to the extent provided by law.
11. Sensitive Questions
These ICRs involve no sensitive questions.
12. Burden Estimates (Hours & Wages)
Organizations that currently provide health coverage that are not designated as minimum
essential coverage may submit a request to CMS that their coverage be recognized as
minimum essential coverage. Sponsors would have to electronically submit to CMS
information regarding their plans and certify that their plans meet substantially all of the
requirements in the Title I of Affordable Care Act, as applicable to non-grandfathered,
individual coverage. Because we do not know how many sponsors would submit a request,
we have estimated the burden for one entity. Average labor costs (including fringe benefits)
are calculated using data available from the Bureau of Labor Statistics.
The burden associated with this certification includes the time needed to collect and input
the necessary plan information and to retain a copy for recordkeeping by clerical staff and
for a manager and legal counsel to review it and for a senior executive to review and sign it.
The certification would be submitted to CMS electronically at minimal cost. We estimate
that it would take a combined total of 4.25 hours (3 hours for clerical staff at an hourly cost
of $30.64, 0.5 hours for a manager at an hourly cost of $55.22, 0.5 hours for legal counsel at
an hourly cost of $83.10 and 0.25 hours for a senior executive at an hourly cost of $112.43)
to prepare and submit the information and certification to CMS and to retain a copy for
recordkeeping purposes. The total cost for one sponsor is estimated to be approximately
$190. The sponsor would need to submit this certification to CMS only once and would
need to resubmit it only if there is any change in coverage.
Table 12.1 Estimated Burden Hours for Minimum Essential Coverage Certification

Type of Form

Number of
Respondents

Number of
Reports

Certification

1

1

Total Estimated
Burden Cost
Burden Hours Per Respondent

4.25

$190

13. Capital Costs
Sponsors are not expected to incur capital costs to fulfill these requirements.

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14. Cost to Federal Government
CMS staff is expected to review the information submitted by requesting sponsors. We
anticipate that a reviewer will need 3 hours to review each submission.
Table 14.1 Estimated Cost to Federal Government
Type of
Federal
Employee
Support

Total Burden
Hours per
Reviewer

Total
Reviewers

Hourly Wage
Rate (GS 14
equivalent) –
(includes fringe)

Total Federal
Government
Costs

Review of state
rating
information

3 hrs per submission

1

$72

$ 216 per
submission

Salaries are based on a 14 Grade/Step 1 in the Washington DC area with a benefit allowance
for a total annual salary of $150,000.
15. Changes to Burden
Not applicable.
16. Publication/Tabulation Dates
There are no publication or tabulation dates associated with these ICRs.
17. Expiration Date
There is no expiration date for this collection requirement.
18. Certification Statement
There are no exceptions to the certification.

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