CMS-10465 MEC Supporting Statement - Part A_final

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 as
minimum essential coverage for purposes of their enrollees satisfying the minimum coverage
requirement. The final rule titled “Patient Protection and Affordable Care Act; Exchange
Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage
Provisions” designates 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 final rule specifically designates certain types of coverage that have not been designated
in the statute, as minimum essential coverage. In addition, the final rule outlines a process by
which other types of coverage can seek to be recognized as minimum essential coverage. It
requires 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 final rule requires sponsors of individual coverage that seek to have such coverage
recognized as minimum essential coverage to adhere to certain procedures. They will 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 out-of-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 applicable
to non-grandfathered individual health insurance coverage and any plan documentation or
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other information that demonstrate that the coverage sponsored by the organization
substantially complies with these provisions.
The final rule also requires that sponsors whose health coverage are recognized as minimum
essential coverage will have to provide a notice to enrollees informing them that the plan has
been designated minimum essential coverage for the purposes of the Internal Revenue Code.
The notice requirement may be satisfied by inserting a statement into existing plan
documents. Plan documents are usually reviewed and updated annually before a new plan
year begins. Sponsors may insert the statement in their plan documents at that time at
minimal cost. Once the notice is included in plan documents in 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 will 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 will 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 was published as part of a notice of proposed rulemaking
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on February 1, 2013 (78 FR 7348).
Some commenters suggested that organizations submitting such requests provide more
information regarding their plans rather than simply certifying that their plans meet
substantially all of the requirements in the Title I of Affordable Care Act. We have revised
the certification to request plan documentation or other information that demonstrate that the
coverage sponsored by the organization substantially complies with the provisions of Title I
of the Affordable Care Act applicable to non-grandfathered individual health insurance
coverage.
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 will 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. CMS sought comments on how many sponsors are likely to submit a
request to CMS that their coverage be recognized as minimum essential coverage but did not
receive any information. We assume, however, that at least 10 sponsors will submit such a
request. 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 and attachments would be submitted to CMS electronically at minimal cost.
We estimate that it would take a combined total of 5.25 hours (4 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 $220. The sponsor will need to submit this certification to CMS only once
and will need to resubmit it only if there is any change in coverage. Therefore, the total
burden for 10 sponsors will be 52.5 hours, with an equivalent cost of approximately $2,200.

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Table 12.1 Estimated Burden Hours for Minimum Essential Coverage Certification

Type of Form

Number of
Respondents

Number of
Reports

Certification

10

1

Total Estimated
Burden Cost
Burden Hours Per Respondent

52.5

$2,200

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

30 hours

1

$72

$ 2,160

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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