CMS-10486 Supporting Statement CMS-9958-F_HCSM

SUPPORTING STATEMENT FOR THE INFORMATION COLLECTION
REQUIREMENTS CONTAINED IN THE HEALTH CARE SHARING MINISTRY
INFORMATION COLLECTION REQUEST
(CMS-10486/OCN-0938-NEW)

A. Background
The Patient Protection and Affordable Care Act, Public Law 111-148, enacted on March
23, 2010, and the Health Care and Education Reconciliation Act, Public Law 111-152, enacted
on March 30, 2010 (collectively, “Affordable Care Act”), expand access to health insurance for
individuals and employees of small businesses through the establishment of new Affordable
Insurance Exchanges (Exchanges), including the Small Business Health Options Program
(SHOP). The Exchanges, which will become operational by January 1, 2014, will enhance
competition in the health insurance market, expand access to affordable health insurance for
millions of Americans, and provide consumers with a place to easily compare and shop for
health insurance coverage.
The data collection and reporting requirements in “Patient Protection and Affordable
Care Act; Exchange Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential
Coverage Provisions” (CMS-9958-F), address federal requirements that states must meet with
regard to the Exchange minimum function of performing eligibility determinations and issuing
certificates of exemption from the shared responsibility payment. The final regulation addresses
standards related to eligibility, including the verification and eligibility determination process,
eligibility redeterminations, options for states to rely on HHS to make eligibility determinations
for certificates of exemption, and reporting.

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The submission seeks OMB approval of the information collection requirements
associated with 45 CFR parts 155.
B. Justification
1.

Need and Legal Basis
Section 1501(b) of the Affordable Care Act added section 5000A of the Internal Revenue

Code (the Code) to a new chapter 48 of subtitle D (Miscellaneous Excise Taxes) of the Code
effective for months beginning after December 31, 2013. Section 5000A of the Code, which was
subsequently amended by the TRICARE Affirmation Act of 2010, Public Law 111-159 (124
Stat. 1123) and Public Law 111-173 (124 Stat. 1215), requires that nonexempt individuals either
maintain minimum essential coverage or make a shared responsibility payment, includes
standards for the calculation of the shared responsibility payment, describes categories of
individuals who may qualify for an exemption from the shared responsibility payment, and
provides the definition of minimum essential coverage.
Section 1311(d)(4)(H) of the Affordable Care Act specifies that the Exchange will,
subject to section 1411 of the Affordable Care Act, grant certifications of exemption from the
shared responsibility payment specified in section 5000A of the Code. Section 1311(d)(4)(I)(i)
of the Affordable Care Act specifies that the Exchange will transfer to the Secretary of the
Treasury a list of the individuals to whom the Exchange provided such a certification. Section
1411(a)(4) of the Affordable Care Act provides that the Secretary of Health and Human Services
(the Secretary) will establish a program for determining whether a certification of exemption
from the shared responsibility requirement and penalty will be issued by an Exchange under
section 1311(d)(4)(H). We interpret this provision as authorizing the Secretary to determine
“whether,” with respect to the nine exemptions provided for under section 5000A, Exchanges

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would perform the role of issuing certifications of exemption under section 1311(d)(4)(H),
whether eligibility for the exemption would be determined solely through tax filing, or whether
both processes would be available. Under this interpretation, the responsibility under section
1311(d)(4)(H) to issue certifications of exemption would be “subject to” these determinations by
the Secretary under section 1411(a)(4), and Exchanges would thus only be required to issue
certifications of exemption with respect to exemptions not exclusively assigned to IRS.
Section 1321 of the Affordable Care Act discusses state flexibility in the operation and
enforcement of Exchanges and related requirements. Section 1321(a) provides broad authority
for the Secretary to establish standards and regulations to implement the statutory requirements
related to Exchanges and other components of title I of the Affordable Care Act as amended by
the Health Care and Education Reconciliation Act of 2010. Section 1311(k) of the Affordable
Care Act specifies that Exchanges may not establish rules that conflict with or prevent the
application of regulations promulgated by the Secretary under Subtitle D of Title I of the
Affordable Care Act.
In accordance with our interpretation of these sections of the Affordable Care Act, and
the authority provided by, inter alia, section 1321(a) of the Affordable Care Act, we specify that
under the program established under section 1411(a)(4) of the Affordable Care Act, the
Exchange would determine eligibility for and grant certificates of exemption as described below.
These information collection requirements are set forth in 45 CFR Parts 155.
2.

Information Users
The data collection and reporting requirements described below are critical to the basic

ability of Exchanges to determine eligibility for and issue certificates of exemption, and will also
assist Exchanges, HHS, and IRS in ensuring program integrity and quality improvement.

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3.

Use of Information Technology
HHS anticipates that a majority of the activities described below in this rule will be

automated. Exchanges are expected to develop automated notice templates for many of the
specified notices, and distribute the majority of these notices through secure electronic accounts.
The entities issuing notices or collecting information will develop the initial template after which
the templates will be automatically populated with the appropriate information for the receiving
party. A majority of the information that is collected in accordance with this rule will be
submitted electronically. Staff, or systems, will analyze, review, or process the data through
largely electronic means and communicate with individuals, states, and HHS using e-mail,
telephone, or other electronic means whenever possible.
4.

Duplication of Efforts
These information collections do not duplicate any current information collections. They

contain information needed for a new program.
5.

Small Businesses
We estimate minimal burden on small business as they are not required to issue

certificates of exemption.
6.

Less Frequent Collection
Due to the required flow of information between multiple parties, it is necessary to

collect information according to the indicated frequencies. If the information is collected less
frequently, the result would be less accurate, untimely or unavailable information about
eligibility determinations for Exchanges, HHS, IRS, and individuals. This would have
implications on the federal tax filing process due to IRS’s reliance on information about
eligibility determinations and certificates of exemption that have been issued by the Exchange in

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order for IRS to administer the shared responsibility payment. In summary, if the information is
collected less frequently, it would lead to an overall stress on the organizational structure of the
Exchanges and decrease in benefit to individuals.
7.

Special Circumstances that may cause respondents to submit information in fewer than 30
days
Not applicable

8.

Federal Register/Outside Consultation
As part of Exchange implementation to date, we have consulted with contractors,

academia, states, and industry of the feasibility of this information collection. CMS has sought
input from states and other federal agencies, such as IRS. We have based several of the
requirements in this information collection from the consultations with these outside entities.
A 60-day Federal Register notice is scheduled to publish on _____________________to solicit
public comments on the information collection requirements outlined in this document.
9.

Payments/Gifts to Respondents
No payments and/or gifts will be provided to respondents.

10. Confidentiality
To the extent of the applicable law and HHS policies, we will maintain respondent
privacy with respect to the information collected.
11. Sensitive Questions
Not applicable
12. Burden Estimates (Hours & Wages)
For purposes of presenting an estimate of paperwork burden, we note that these estimates
generally reflect burden for the first year, and that the associated burden in subsequent years will

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be significantly lower because many of the standards in the regulation will be fulfilled through
the development of automated processes that will involve only maintenance in future years.
Therefore, these estimates should be considered an upper bound of burden for non-federal
entities. These estimates may be adjusted in future PRA packages as Exchange development
moves forward.
We utilize data from the Bureau of Labor Statistics to derive average costs for all
estimates of salary in establishing the information collection requirements. Salary estimates
include the cost of fringe benefits, calculated at 30.4 percent of total labor costs, which is based
on the June 2012 Employer Costs for Employee Compensation report by the U.S. Bureau of
Labor Statistics.
PART 155- EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
Subpart G— Exchange Functions in the Individual Market: Eligibility Determinations for
Exemptions
A. Verification process related to eligibility for exemptions (§155.615)
§155.615 outlines the standards for Exchanges to verify applicant information as it
pertains to exemption requests.
In order to facilitate the provision of an exemption for membership in a health care
sharing ministry to the members of such ministry, we specify in §155.615(c)(2) that an
organization that believes that it meets the statutory standards to be considered a health care
sharing ministry will submit certain information to HHS. We are aware of four organizations that
have made public statements regarding their status as a health care sharing ministry, and so have
estimated burden for four entities. The burden associated with this process includes the time for

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the organization to collect and input the necessary information, maintain a copy for
recordkeeping by clerical staff, for a manager and legal counsel to review it and for a senior
executive to review and sign it. The information 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 to CMS and to retain a copy for
recordkeeping purposes. The total cost for one organization is estimated to be approximately
$189, for a total of $756 for four organizations.
Table 1- Estimated Burden for Health Care Sharing Ministries

Labor Category
Clerical Staff
Manager
Attorney
Senior Executive
Total

Number of Hourly Labor Burden
Employees Costs
Hours
1
$30.64
3
1
$55.22
0.5
1
$83.10
0.5
1
$112.43
0.25
4
4.25

Total Burden
Total Burden Costs (4
organizations)
Costs (per
organization)
$91
$28
$42
$28
$756
$189

13. Capital Costs
Not applicable
14. Cost to Federal Government
Not applicable
15. Changes to Burden
There are no changes to the burden. This is a new data collection.
16. Publication/Tabulation Dates

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TBD
17. Expiration Date
Not applicable

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