Program Integrity II Information Collections Supporting Statement

Program Integrity II Information Collections - Supporting Statement – Part A
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), also called Marketplaces, including the Small Business Health Options
Program (SHOP). The Exchanges, for which enrollment will become operational by October 1, 2013
and coverage will become effective as early as 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.
On June 19, 2013, HHS published the proposed rule CMS-9957-P: Program Integrity: Exchanges,
SHOP, Premium Stabilization Programs, and Market Standards (78 FR 37302) (Program Integrity
Proposed Rule). Among other things, the Program Integrity Proposed Rule sets forth financial integrity
provisions and protections against fraud and abuse. The third party disclosure requirements and data
collections proposed in the Program Integrity Proposed Rule support the oversight of premium
stabilization programs (transitional reinsurance, risk corridors and risk adjustments), State Exchanges,
and qualified health plan (QHP) issuers in Federally- facilitated Exchanges (FFEs). HHS finalized
some provisions from the Program Integrity Proposed Rule in a final rule, Patient Protection and
Affordable Care
Act; Program Integrity: Exchange, SHOP, and Eligibility Appeals, published on August 30,
2013. HHS displayed the final rule that finalized the remaining provisions from the Program Integrity
Proposed Rule, CMS-9957-F2; CMS-9964-F3: Patient Protection and Affordable Care Act; Program
Integrity: Exchange, Premium Stabilization Programs, and Market Standards; Amendments to the HHS
Notice of Benefit and Payment Parameters for 2014 (Program Integrity Final Rule II) on October 24,
2013.
B. Justification
1. Need and Legal Basis
Section 1311(c)(4) of the Affordable Care Act directs the Secretary of Health and Human Services
(Secretary) to establish an enrollee satisfaction survey system that would evaluate the level of enrollee
satisfaction of members in each QHP offered through an Exchange with more than 500 enrollees in the
previous year.
Section 1321(a) of the Affordable Care Act provides general authority for the Secretary to establish
standards and regulations to implement the statutory requirements related to Exchanges, QHPs, and
other components of Title I of the Affordable Care Act.
Section 1321(c)(1) of the Affordable Care Act requires the Secretary to establish and operate an FFE
within States that either: do not elect to operate an Exchange; or, as determined by the Secretary, will
not have any required Exchange operational by January 1, 2014.
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Section 1321(c)(2) of the Affordable Care Act authorizes the Secretary to enforce the
Exchange standards using civil money penalties (CMPs) on the same basis as detailed in section
2723(b) of the Public Health Service Act (PHS Act). Section 2723(b) of the PHS Act authorizes the
Secretary to impose CMPs as a means of enforcing the individual and group market reforms contained
in Title XXVII, Part A of the PHS Act when a State fails to substantially enforce these provisions.
Section 1311(e)(1)(B) of the Affordable Care Act specifies that an Exchange may certify a health plan
as a QHP if the Exchange determines that making available such a health plan is in the interests of
qualified individuals and qualified employers in the State or States in which the Exchange operates.
Section 1341 of the Affordable Care Act establishes a transitional reinsurance program which begins
in 2014 and is designed to provide issuers with greater payment stability as insurance market reforms
are implemented and Exchanges facilitate increased enrollment. Section 1342 of the Affordable Care
Act establishes a temporary risk corridors program which permits the Federal government and QHPs
to share in gains or losses resulting from inaccurate rate setting from 2014 through 2016. Section 1343
of the Affordable Care Act establishes a permanent risk adjustment program which is intended to
provide increased payments to health insurance issuers that attract higher-risk populations, such as
those with chronic conditions, and eliminate incentives for issuers to avoid higher-risk enrollees.
Section 1401 of the Affordable Care Act amended the Internal Revenue Code (26 U.S.C.) to add section
36B, allowing a refundable premium tax credit to help individuals and families afford health insurance
coverage. Under sections 1401, 1411, and 1412 of the Affordable Care Act and 45 CFR part 155,
subpart D, an Exchange will make a determination of advance payments of the premium tax credit for
individuals who enroll in QHP coverage through an Exchange and seek financial assistance. Section
1402 of the Affordable Care Act provides for the reduction of cost sharing for certain individuals
enrolled in a QHP through an Exchange, and section 1412 of the Affordable Care Act provides for the
advance payment of these reductions to issuers. Section 1313 of the Affordable Care Act, combined
with section 1321 of the Affordable Care Act, provides the Secretary with the authority to oversee the
financial integrity, compliance with HHS standards, and efficient and non-discriminatory administration
of State Exchange activities. Section 1313(a)(6)(A) of the Affordable Care Act specifies that payments
made by, through, or in connection with an Exchange are subject to the False Claims Act (31 U.S.C.
3729, et seq.) if those payments include any Federal funds.
The Program Integrity Final Rule II contains provisions that mandate third-party disclosure and data
collections necessary to protect Federal funds and ensure that States Exchanges, premium
stabilization programs, and QHP issuers in FFEs are in compliance with the Affordable Care Act.
These information collection requirements are proposed for 45 CFR Parts 153, 155, and 156.
2. Information Users
The program integrity data collections and third-party disclosure requirements will assist HHS in
determining Exchange compliance with Federal standards. The data collection and third- party
disclosure requirements will also assist HHS in monitoring QHP issuers in FFEs for compliance with
Federal QHP issuer standards. The data collected by health insurance issuers and Exchanges will help to
inform HHS, Exchanges, and health insurance issuers as to the participation of individuals, employers,
and employees in the individual Exchange, the SHOP, and the premium stabilization programs.
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3. Use of Information Technology
HHS anticipates that a majority of the systems, notices, and information collection required by this rule
will be automated. A majority of the information that is required by the collection of information for
this rule will be submitted electronically. HHS staff will analyze or review the data in the same manner
by which it was submitted and communicate with States, health insurance issuers, and other entities
using e-mail, telephone, or other electronic means.
HHS will be leveraging existing IT systems for the collection of the State specific data set forth in the
information collection requirements in 45 CFR 156.135. HHS aims to lessen the burden on states and
minimize the need for any start-up costs for the required submission by using existing IT systems.
4. Duplication of Efforts
This information collection does not duplicate any other Federal effort.
5. Small Businesses
This information collection will not have a significant impact on small business.
6. Less Frequent Collection
Due to the required flow of information between multiple parties and flow of funds for payments for
health insurance coverage within the Exchange, 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 eligibility, enrollment or payment information for Exchanges, insurers,
employers and individuals. This would lead to delayed payments to insurers; late charges to or payments
by employers and enrollees; inaccurate or inappropriate payments of advance premium tax credits and
cost sharing reductions; the release of misleading information regarding health care coverage to
potential enrollees; and an overall stress on the organizational structure of the Exchanges. If the
information is not collected in the timeframe proposed, HHS will not be able to properly ensure the
financial integrity of Federal funds.
7. Special Circumstances
HHS proposes maintenance of records requirements in §§153.240, 153.310, 153.405,
153.410, 155.1210, and 156.705. In these sections, HHS is proposing to require States and QHP
issuers in FFEs to maintain records for a time period of ten years. This time frame is necessary
for HHS to be consistent with the statute of limitations under the False Claims Act and the record
retention requirements set forth in 45 CFR 153.620(b).
In proposed §156.905, HHS proposes to provide respondents with the right to request a hearing if the
request complies with proposed §156.907 within 30 days after the date of issuance of either HHS’
notice of proposed assessment under proposed §156.805, notice of decertification of a QHP under
§156.810(c) or §156.810(d). The timeline is necessary to provide entities with the protections provided
by the Administrative Procedure Act, 5 U.S.C. 554 and 556.
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8. Federal Register/Outside Consultation
The proposed rule soliciting comments was published on June 19, 2013 (78 FR 37032). HHS has
consulted with stakeholders on many of the requirements in this information collection, and has based
many of the requirements in this information collection on those consultations. HHS consulted with
stakeholders through regular meetings with the National Association of Insurance Commissioners
(NAIC), regular contact with States through the Exchange grant process, and meetings with other
stakeholders including consumer advocates, employers, agents, brokers, and other interested parties.
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, HHS will maintain respondent privacy with
respect to the information collected. Nothing in the information collection should be interpreted as
preventing a State from being allowed to disclose its own data.
11. Sensitive Questions
There are no sensitive questions included in this information collection effort.
Burden Estimates (Hours & Wages)
The following sections of this document contain estimates of burden imposed by the associated
information collection requirements (ICRs); however, not all of these estimates are subject to
the ICRs under the PRA for the reasons noted. Salaries for the positions cited were mainly
taken from the Bureau of Labor Statistics (BLS) Web site
(http://www.bls.gov/oco/ooh_index.htm).
ICRs Regarding Program Integrity Provisions Related to State Operation of the Reinsurance Program
(§153.260)
In §153.260, State-operated reinsurance programs are directed to: (1) keep an accurate accounting of
reinsurance contributions, payments, and administrative expenses; (2) submit to HHS and make public
a summary report on program operations; and (3) engage an independent qualified auditing entity to
perform a financial and programmatic audit for each benefit year, provide the audit results to HHS,
and make public summary of the audit results. Fewer than 10 States have informed HHS that they will
operate reinsurance for the 2014 benefit year. While these reinsurance records requirements are subject
to the PRA, we believe the associated burden is exempt under 5 CFR 1320.3(c)(4) and 44 USC
3502(3)(A)(i), since fewer than 10 entities would be affected. Therefore, we are not seeking approval
from OMB for these information collection requirements.
ICRs Regarding Program Integrity Provisions Related to State Operation of the Risk Adjustment
Program (§153.310(c)(4) and §153.310(d)(3)-(4), and §153.365)
In §153.310(c)(4), §153.310(d)(3)-(4), and §153.365, States are required to perform risk adjustment
4

assessments by: (1) retaining records for a 10-year period; (2) submitting an interim report in its first
year of operation; (3) submitting to HHS and make public a summary report on program operations for
each benefit year; and (4) keeping an accurate accounting for each benefit year of all receipts and
expenditures related to risk adjustment payments, charges, and administrative expenses. Fewer than 10
States have informed HHS that they will operate risk adjustment for the 2014 benefit year.
Since the burden associated with collections from fewer than 10 entities is exempt from the PRA under
5 CFR 1320.3(c)(4) and 44 USC 3502(3)(A)(i), we are not seeking approval from OMB for the risk
adjustment information collection requirements. However, if more than nine States elect to operate risk
adjustment in the future, we will seek approval from OMB for these information collections.
ICRs Regarding Maintenance of Records for Contributing Entities and Reinsurance-eligible
Plans (§153.405(h) and §153.410(c))
In §153.405(h) and §153.410(c), record retention standards for contributing entities and reinsuranceeligible plans are included. In §153.405(h), contributing entities are required to maintain documents and
records, whether paper, electronic, or in other media, sufficient to substantiate the enrollment count
submitted pursuant to §153.405(b) for a period of at least 10 years, and to make those documents and
records available upon request to HHS, the HHS Office of the Inspector General (OIG), and the
Comptroller General.
On March 11, 2013 HHS published a list of data elements required to receive payments in conjunction
with information collection associated with the Patient Protection and Affordable Care Act; Notice of
Benefit and Payment Parameters for 2014 (78 CFR 15410). Issuers and contributing entities are not
required to submit data to HHS and/or complete an application because issuers and contributing only
need to maintain records.
We estimate that 26,200 contributing entities will be subject to this requirement, based on the
Department of Labor’s (DOL) estimated count of self-insured plans and the number of fully insured
issuers that we estimate will make reinsurance contributions. We believe that most of these contributing
entities will already have the systems in place for record maintenance, and that the additional burden
associated with this requirement is the time, effort, and additional labor cost required to maintain the
records. Therefore, we estimate that this requirement will take each contributing entity approximately 5
hours annually to maintain records. We estimate that it will take an insurance operations analyst 5 hours
(at $38.49 per hour) to meet the requirements in §153.405(h). On average, the cost for each contributing
entity would be approximately $192.45 annually. The aggregate burden for the 26,200 contributing
entities subject to this requirement of is 131,000 hours at a cost of $5,042,190.00.

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Labor
Category

Number of
Employees

1

Insurance
Operations
Analyst
Total
(based on the
26,200 entities)

Hourly Labor Burden
Costs (Hourly Hours
rate + 35%
Fringe benefits)

Total Burden
Costs

$38.49

5

$192.45

5

$192.45

Total Burden
Costs (All
Respondents)

$5,042,190.00

In §153.410(c), issuers of reinsurance-eligible plans are required to maintain documents and records,
whether paper, electronic, or in other media, sufficient to substantiate the requests for reinsurance
payments made pursuant to §153.410(a) for a period of at least 10 years, and must make that
evidence available upon request to HHS, the OIG, the Comptroller General, or their designees, (or, in
the case of a State operating reinsurance, the State or its designees), for purposes of verification of
reinsurance payment requests. We estimate that 1,900 issuers of reinsurance-eligible plans will be
subject to this requirement, based on HHS’s most recent estimate of the number of fully insured
issuers that will submit requests for reinsurance payments. We estimate this requirement will take
each issuer of a reinsurance-eligible plan approximately 10 hours annually to maintain the records.
To fulfill this provision, we estimate that it will take an insurance operations analyst 10 hours (at
$38.49 per hour). Therefore, the cost per issuer is approximately $384.90 annually. The aggregate
burden for 1,900 issuers is 19,000 hours at a cost of $731,310.00 as a result of this requirement.

Labor
Category

Insurance
Operations
Analyst
Total (based
on the 1,900
issuers)

Number of
Employees

1

Hourly Labor
Burden
Costs (Hourly Hours
rate + 35%
Fringe benefits)
$38.49
10

10

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$384.90

$384.90

$731,310.00

ICRs Related to Oversight and Financial Integrity Standards for State Exchanges (§155.1200 to
§155.1210)
Section 155.1200(a)(1) through (3) requires the State Exchange to follow generally accepted
accounting principles (GAAP) and to monitor and report to HHS all Exchange-related activities. This
6

includes keeping an accurate accounting of all Exchange receipts and expenditures. The State
Exchanges will electronically maintain the information as a result of normal business practices;
therefore, the burden does not include the time and effort needed to maintain the Exchange-related
activity information. The burden associated with this requirement includes a computer programmer
taking 8 hours (at $48.61 an hour) to modify the system to maintain and monitor the information
required under §155.1200(a)(1) through (3), an analyst taking 8 hours (at $58.05 an hour) to pull the
necessary data under §155.1200(a)(1) through (3) in the State Exchange accounting system, and a
senior manager taking 2 hours (at $77.00 an hour) to oversee the development and transmission of the
reported data. We estimate this requirement will take 18 total hours at a cost of $1,007.28 for each
State Exchange. Therefore, for the 18 State Exchanges, we estimate an aggregate burden of 324 hours
at a cost of $18,131.04.

Labor
Category

Number of
Employees

Computer
Programmer
Analyst

1

Hourly Labor
Burden
Costs (Hourly Hours
rate + 35%
Fringe benefits)
$48.61
8

Total Burden
Costs

1

$58.05

8

$464.40

Senior
Manager
Total (based
on the 18 State
Exchanges)

1

$77.00

2

$154.00

18

$1,007.28

Total Burden
Costs (All
Respondents)

$388.88

$18,131.04

Section 155.1200(b)(1) requires the State Exchange to submit a financial statement, in accordance
with GAAP to HHS annually to be publicly displayed. The burden associated with this reporting
requirement is the time and effort needed to develop and submit the financial statement to HHS. The
State Exchanges will electronically submit the information. The burden associated with this
requirement includes a computer programmer taking 40 hours (at $48.61 an hour) to design the
financial statement report, an analyst taking 8 hours (at $58.05 an hour) pulling the necessary data
and inputting it into the financial statement report, and a senior manager taking 2 hours (at $77.00 an
hour) overseeing the development and transmission of the reported data. We estimate a burden of 50
total hours for each State Exchange at a cost of $2,562.80. Therefore, the aggregate burden for the 18
State Exchanges is 900 hours at a cost of $45,410.40.
Labor
Category

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)

Total Burden
Costs

Total Burden
Costs (All
Respondents)
7

Computer
Programmer
Analyst

1

$48.61

40

$1,944.40

1

$58.05

8

$464.40

Senior
Manager
Total (based on
the 18 State
Exchanges)

1

$77.00

2

$154.00

50

$2,562.80

$45,410.40

Section 155.1200(b)(2) requires the State Exchange to submit eligibility and enrollment reports to
HHS. The State Exchanges will electronically maintain the information as a result of normal business
practices, therefore the burden does not include the time and effort required to develop and maintain
the source information. The burden associated with this reporting requirement includes the time and
effort necessary for a computer programmer taking 40 hours (at $48.61 an hour) to design the report
template, an analyst taking 8 hours (at $58.05 an hour) to compile the statistics for the report for
submission to HHS, a privacy officer taking 8 hours (at $64.98 an hour) and senior manager taking 2
hours (at $77.00 an hour) overseeing the development and submission of the reported data. The
burden also includes the time and effort necessary to post the data on the State Exchange Web site.
We estimate an initial year burden of 58 hours at a cost of $3,082.64 to each State Exchange.
Therefore, the aggregate burden for the 18 State Exchanges is 1,044 hours at a cost of $55,487.52.
Labor
Category

Computer
Programmer
Analyst

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$48.61
40

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$1944.40

1

$58.05

8

$464.40

Privacy Officer

1

$64.98

8

$519.84

Senior
Manager
Total (based on
the 18 State

1

$77.00

2

$154.00

58

$3,082.64

$55,487.52

As discussed in §155.1200(b)(3), the State Exchange will report performance monitoring data to
HHS. The performance monitoring data includes information on financial sustainability, operational
efficiency, and consumer satisfaction, which will be reported on an annual basis.
The State Exchanges will electronically maintain the information as a result of normal business
practices developed under Establishment Grants from HHS for this purpose. Therefore the burden
does not include the time and effort needed to develop and maintain the performance data. The
8

burden associated with meeting the reporting requirement includes the time and effort necessary for
a computer programmer taking 40 hours (at $48.61 an hour) to design the report, for an analyst
taking 12 hours (at $58.05 an hour) to pull data into the report and prepare for submission to HHS
and for a senior manager taking 2 hours (at $77.00 an hour) to oversee the development and
transmission of the reported data. Section 155.1200(b) requires the State Exchange to submit to
HHS and to display publicly financial, eligibility and enrollment reports and performance data at
least annually. For those measures reported annually, we estimate that in the initial year a burden of
54 hours at a cost of $2,795.00 for each State Exchange. Therefore, we estimate an aggregate burden
for the 18 State Exchanges of 972 hours at a total cost of $50,031.00.
Labor
Category

Computer
Programmer
Analyst
Senior
Manager
Total (based on
the 18 State
Exchanges)

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$48.61
40

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$1944.40

1

$58.05

12

$696.60

2

$77.00

2

$154.00

54

$2,794.60

$50,301.00

For subsequent years, when the Establishment Grant project period ends we estimate an additional
burden of 208 hours necessary for the computer programmer (at $48.61 an hour) to maintain the
performance data. For the first year, the burden for maintaining the data was already accounted for in
the PRA package for the Exchange Establishment Grants (OMB Control Number 0938-1119);
therefore, we are only including subsequent years in the ICR. We estimate that the total burden from
year 1 will decrease to $25,016.00 assuming a decreased effort and an additional burden of $18,
1996.00 for maintaining the data, yielding a total burden of $44,012.00 for subsequent years.
Section 155.1200(b)(4) requires the State Exchange to make public a summary of the results of the
external financial audit. The burden associated with this requirement is the time and effort for a computer
programmer taking 1 hour (at $48.61 an hour) to design the summary and for an analyst to take 1 hour
(at $58.05 an hour) to pull data into the summary and prepare for public display. For this requirement we
estimate in the initial year a burden of 2 hours for the State Exchanges at a cost of $107.00 each and a
total burden of $1926.00. Therefore, the aggregate burden for the 18 State Exchanges, is estimated at 36
hours at a cost of $1926.00.

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Labor
Category

Computer
Programmer
Analyst

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$48.61
1
1

$58.05

Total (based on
the 18 State
Exchanges)

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$48.61

1

$58.05

2

$106.66

$1,926.00

Section 155.1200(c) (1) through (3) directs the State Exchange to engage an independent audit/review
organization to perform an external financial and programmatic audit of the State Exchange. The
State Exchange will provide the results of the audit and identify any material weakness or significant
deficiency and intended corrective action in a public summary. The burden associated with this third
party disclosure requirement includes the burden for an analyst level employee taking 3 hours (at
$48.61 an hour) to pull data into a report, the time and effort necessary for a health policy analyst
taking 2 hours (at $58.05 an hour) to prepare the report of the audit results, and the time for senior
management taking 1 hours (at $77.00 an hour) to review and submit to HHS. We estimate a burden
of 6 hours at a cost of $338.93 for each State Exchange. Therefore, the aggregate burden for the 18
State Exchanges is 108 hours at a cost of $6,100.74.
Labor
Category

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$48.61
3

Total Burden
Costs

Health Policy
Analyst

1

$58.05

2

$116.10

Senior
Manager

1

$77.00

1

$77.00

6

$338.93

Analyst

Total (based on
the 18 State
Exchanges)

Total Burden
Costs (All
Respondents)

$145.83

$6,100.74

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As stated in §155.1210(a), the State Exchange and its contractors, subcontractors, and agents must
maintain for 10 years, books, records, documents, and other evidence of accounting procedures
and practices. Section 155.1210(b) specifies that the records include information concerning
management and operation of the State Exchange’s financial and other record keeping systems.
The records must also include financial statements, including cash flow statements, and accounts
receivable and matters pertaining to the costs of operation. The burden associated with this record
keeping requirement includes the time and effort necessary for a network administrator taking 16
hours (at $46.86 an hour) to modify the State systems to maintain the information required under
§155.1210(b), for a health policy analyst taking 8 hours (at $58.05 an hour) to enter the data under
§155.1210(b) into the State Exchange record retention system, and for senior management taking
2 hours (at $77.00an hour) to oversee record collection and retention. We estimate that it will take
26 hours at a cost of $1,368.16 for each State Exchange. Therefore, the aggregate burden for the
18 State Exchanges is 468 hours at a cost of $24,626.88. The burden associated with completing
the documents required by §155.1200 to §155.1210, including the application, is discussed in the
State-Based Marketplace Annual Reporting Tool (SMART) information collection (FR Doc.
2013-27305).
Labor
Category

Network
Administrator
Health Policy
Analyst
Senior
Manager
Total (based on
the 18 State
Exchanges)

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$46.86
16

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$749.76

1

$58.05

8

$464.40

1

$77.00

2

$154.00

26

$1,368.16

$24,626.88

ICRs Related to Change of Ownership (§156.330)
§156.330 requires the QHP issuer to notify HHS and provide the legal name and tax identification
number of the new owner of the QHP and the effective date of the change of ownership to HHS
within 30 days of the effective date. We estimate fewer than 10 QHP issuers will report changes of
ownership. While this reporting requirement is subject to the PRA, we believe the associated burden
is exempt under 5 CFR 1320.3(c)(4) and 44 USC 3502(3)(A)(i), since fewer than 10 entities would
be affected. Therefore, we are not seeking approval from OMB for these information collection
requirements.

11

ICRs Related to Payment for Cost-Sharing Reductions (§156.430)
§156.430 requires QHP issuers to notify HHS prior to the start of each benefit year whether or not it
selects the simplified methodology for the benefit year. We estimate that each issuer using the
simplified methodology would incur labor costs of 40 hours of work by an actuary (at a wage rate of
$56.89) and 20 hours of work by an insurance manager (at a wage rate of $67.44) to develop the
effective cost-sharing parameters and actuarial memorandum, and calculate the amount of costsharing reductions provided, resulting in a cost of approximately $3,624 per issuer. Therefore, the
aggregate burden for the 1,200 issuers is estimated at 72,000 hours at a cost of $2,174,640.00.
Labor
Category

Number of
Employees

Hourly Labor
Burden
Costs (Hourly Hours
rate + 35%
Fringe benefits)

Total Burden
Costs

Actuary

1

$56.89

40

$2,275.60

Insurance
Manager
Total (based
on the 1,200
issuers)

1

$67.44

20

$1,348.80

60

$3,624.40

Total Burden
Costs (All
Respondents)

$2,174,640.00

Due to the modified simplified methodology in the final rule, we updated this estimate to require 42
hours of work by an actuary and 22 hours of work by an insurance manager, resulting in a cost of
approximately $3,873 per issuer. Although we cannot predict the precise number of issuers that will
select either the standard or simplified methodology, we estimate that approximately half of QHP
issuers (600 issuers) will implement the simplified methodology. Therefore, we estimate that the
provisions of this rule will result in an incremental savings of approximately $57,676,164 ($60 million
that would have been incurred by these issuers under the standard methodology, minus 600 multiplied
by $3,873) by reducing the overall administrative costs that issuers incur. HHS intends on publishing
a separate CSR reconciliation information collection to be effective for CSR reconciliation in 2015 for
the 2014 benefit year.
ICRs Related to Oversight of Cost-sharing Reductions and Advance Payment of the Premium
Tax Credit (§155.340, §156.410, §156.460 and §156.480)
Section 156.460 requires a QHP issuer to notify the enrollee within 45 calendar days of the QHP
issuer’s discovery of the error, when the QHP issuer improperly reduces the premium by the amount
of the advance payment of the premium tax. A parallel provision is established under §155.340 and
156.410(c) and (d) where a QHP issuer must notify the enrollee within 45 calendar days of the QHP
issuer’s discovery of the error of a misapplication of the cost-sharing reduction or the improper
assignment to a plan variation (or standard plan without cost-sharing reductions) and subsequent
reassignment. The notifications sent out by QHP issuers to enrollees are part of standard billing
12

practices and therefore do not create an additional burden on the Exchange or QHP issuers as
applicable. Therefore, HHS does not estimate a burden for this notification.
In §156.480(a), we extend the standards set forth in proposed §156.705 concerning maintenance of
records to a QHP issuer in the individual market on State Exchange with respect to cost-sharing
reductions and advance payments of the premium tax credit. We believe that the burden of maintaining
records related to cost-sharing reductions and advance payments of the premium tax credit for QHP
issuers in an FFE is already accounted for in the burden for finalized §156.705, described elsewhere in
the Collection of Information section of this final rule. On average, we estimate each QHP issuer in a
State Exchange will incur a cost of approximately $2,232.54 to comply with this record maintenance
requirement. This reflects 46 hours of work by an insurance operations analyst (at $38.49 an hour) and
6 hours by a senior manager (at $77.00 an hour), for a total of 52 burden hours. Based on our most
recent estimates, we assume that there will be 791 QHP issuers in the individual market on State
Exchanges in 2014. Therefore, the aggregate burden for the 791 QHP issuers is 41,132 hours for a total
cost of approximately $1,765,939.10 as a result of this requirement. HHS does not specify the
technology a QHP issuer must use to maintain these records. Additionally, issuers do not have to
complete a template for records maintenance; therefore, the issuer can choose to use to maintain these
records electronically, in hardcopy, or a combination of both.
Labor
Category

Number of
Employees

Insurance
Operations
Analyst

1

Hourly Labor
Burden
Costs (Hourly Hours
rate + 35%
Fringe benefits)
$38.49
46

Total Burden
Costs

Senior
Manager
Total (based
on 791 QHP
issuers)

1

$77.00

6

$462.00

52

$2,232.54

Total Burden
Costs (All
Respondents)

$1,770.54

$1,765,939.10

Section 156.480(b) established for each benefit year, an issuer that offers a QHP in the individual
market through a State Exchange or an FFE report to HHS annually, in a timeframe and manner
required by HHS, summary statistics with respect to cost-sharing reductions and advance payments
of the premium tax credit. We estimated that it would take an insurance operations analyst 16
hours (at $38.49 an hour) annually and one senior manager 2 hours (at $77.00 an hour) to gather
summary information and prepare a report for submission to HHS. For each issuer this requirement
would take 18 hours at a cost of $769.84 annually to fulfill. Therefore, the aggregate burden for
1,200 issuers is 21,600 hours at a cost of $923,808.00.
13

Labor
Category

Insurance
Operations
Analyst
Senior
Manager
Total (based
on 1200
issuers)

Number of
Employees

Total Burden
Costs

1

Hourly Labor
Burden
Costs (Hourly Hours
rate + 35%
Fringe benefits)
$38.49
16

1

$77.00

2

$154.00

18

$769.84

Total Burden
Costs (All
Respondents)

$615.84

$9223,808.00

Another requirement was added in the final rule that the summary reports also include information on
misapplication of cost-sharing reductions and advance payments of the premium tax credit. We
estimate that will take an insurance operations analyst 3 hours (at $38.49 an hour) annually and one
senior manager 1 hours (at $77.00 an hour) to gather and prepare this additional information for the
summary report, resulting in an additional burden of 4,800 hours and total costs of approximately
$230,964 for 1,200 QHP issuers ($192.84, on average, for each issuer).
Labor
Category

Insurance
Operations
Analyst
Senior
Manager
Total (based
on 1,200 QHP
issuers)

Number of
Employees

Total Burden
Costs

1

Hourly Labor
Burden
Costs (Hourly
Hours
rate + 35%
Fringe benefits)
$38.49
3

1

$77.00

1

$77.00

4

$192.47

Total Burden
Costs (All
Respondents)

$115.47

$230,964.00

ICRs Related to Oversight and Financial Integrity Standards for Issuers of Qualified Health
Plans in the Federally-facilitated Exchange (§156.705 to §156.715)
The burden estimates for §§156.705 and 156.715 reflect the assumption that the FFEs will include
475 QHP issuers. We update the number of issuers in the FFEs from the original estimated number
to reflect more current information on the number of issuers expected to participate in the FFEs.
The burden estimate is based on HHS estimates of the labor costs related to maintaining these
records; issuers already have the records associated with this provision. Additionally, HHS does
not specify the technology issuers choose to use to maintain these records. Therefore, HHS will
not provide issuers with a standardized collection instrument for issuers to submit this information.
14

Section 156.705 provides that issuers offering QHPs in an FFE must maintain all documents and
records (whether paper, electronic or other media), and other evidence of accounting procedures
and practices necessary for HHS to conduct activities necessary to safeguard the financial and
programmatic integrity of the FFEs.
Such activities include: (1) periodic auditing of the QHP issuer’s financial records, including
data related to the QHP issuer’s ability to bear the risk of potential financial losses; and (2)
compliance reviews and other monitoring of a QHP issuer’s compliance with all Exchange
standards applicable to issuers offering QHPs in the FFEs listed in part 156. The burden includes
utilizing existing technology and systems to process and maintain this information. This reflects
60 hours of work by an actuary (at $56.89 an hour), 15 hours by a network administrator (at
$46.86 an hour), 15 hours by a compliance officer (at $53.75 an hour), and 10 hours for a senior
manager to review (at $77.00 an hour). We estimate that it will take 100 hours total at a cost of
$5,693.00 for a QHP issuer to maintain these records for an aggregate burden of 47,500 hours
and $2,704,175 for all 475 QHP issuers.
Labor
Category

Number of
Employees

Actuary

1

Hourly Labor
Burden
Costs (Hourly Hours
rate + 35%
Fringe benefits)
$56.89
60

Total Burden
Costs

Network
Administrator

1

$46.86

15

$702.90

Compliance
Officer
Senior
Manager
Total (based
on all 475
QHP issuers)

1

$53.75

15

$806.25

1

$77.00

10

$770.00

100

$5692.55

Total Burden
Costs (All
Respondents)

$3413.40

$2,704,175.00

Section 156.705(d) provides that QHP issuers must make all records described in paragraph (a) of this
section available to HHS, the OIG, the Comptroller General, or their designees, upon request. In
estimating the annual hour and cost burden on QHP issuers of making these records available to such
authorities upon request, we assumed that such requests would normally be made in connection with a
formal audit or compliance review or a similar process. Our burden estimates for this section address
the hour and cost burden of making records available to HHS, the OIG, the Comptroller General, or
their designees, for audit. Our estimates reflect our assumptions that about 47 QHP issuers would be
subject to a formal audit in a given year and that the burden on issuers of making the records available
would include the time, effort, and associated cost of compiling the information, reviewing it for
completeness, submitting it to the auditor(s), and participating in telephone or in-person interviews.
We anticipate using a risk-based approach to selection of the majority of QHP issuers for compliance
15

review so that burdens to the issuer community would generally be linked to the QHP issuers’ risk.
This reflects 75 hours of work by an actuary (at $56.89 an hour), 10 hours by a compliance officer (at
$53.75 an hour), and 5 hours for a senior manager to review (at $77.00 an hour).We estimate it will
take 90 hours at a cost of $5,189.25 for an issuer to make its records available for an audit for a total of
4,230 hours and $243,894.75 across all QHP issuers subject to this requirement, which we estimate at
an upper end as 100 issuers.
Labor
Category

Actuary
Compliance
Officer
Senior Manager

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$56.89
75

Total Burden
Costs

$4266.75

1

$53.75

10

$537.50

1

$77.00

5

$385.00

90

$5189.25

Total (based on
100 issuers)

Total Burden
Costs (All
Respondents)

$243,894.75

Section 156.715 establishes the general standard that QHP issuers are subject to compliance reviews.
Our burden estimates for §156.715 address the estimated annual hour and cost burden on QHP issuers
of complying with the records disclosure requirements associated with compliance reviews conducted
by an FFE. We assume that HHS will conduct desk reviews of 31 QHP issuers each year. For each
QHP issuer desk review we estimate an average of 40 hours of administrative work to assemble the
requested information by a health policy analyst (at $58.05 an hour), 19.5 hours to review the
information for completeness and an additional 30 minutes for a compliance officer to submit the
information to HHS (at $53.75 an hour). There will also be an additional 10 hours to spend on phone
interviews conducted by the compliance reviewer and 2 hours to spend speaking through processes
with the compliance reviewer (at $53.75 an hour). We estimate it will take 72 hours at a cost of
$4,042.00 for an issuer to make information available to HHS for a desk review for a total of 2,232
hours and $125,302.00 across all issuers that may be subject to this information collection
requirement.
Labor
Category

Health Policy
Analyst
Compliance
Officer

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$58.05
40
1

$53.75

32

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$2322.00
$1720.00

16

Total (based on
conducting desk
reviews of 31
QHP issuers
each year)

72

$4,042.00

$125,302.00

We assume that HHS will conduct onsite reviews of 16 QHP issuers each year. For each onsite
review we estimate it will take an average of 40 hours for a health policy analyst (at $58.05 an hour)
to assemble the requested information, and 19.5 hours for a compliance officer (at $53.75 an hour) to
review the information for completeness and 30 minutes to submit the information to HHS in
preparation for an onsite review. An onsite review requires an additional 2 hours to schedule the
onsite activities with the compliance officer (at $53.75 an hour), 4 hours for introductory meeting, 8
hours to tour reviewers onsite, 10 hours of interview time, 2 hours to walk through processes with the
reviewer, and 4 hours for concluding meetings. This is a total of approximately 60 hours of
preparation time and an additional 30 hours for onsite time for each QHP. We estimate it will take
90 hours at a cost of $5,009.50 for an issuer to make information available to HHS for an onsite
review. We estimate that the burden for all respondents that may be subject to this information
collection will be 1,440 hours at a cost of $80,152.00.
Labor
Category

Health Policy
Analyst
Compliance
Officer
Total (based on
conducting onsite
reviews of 16
QHP issuers each
year)

Number of Hourly Labor Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe
1
$58.05
40
1

$53.75

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$2322.00

50

$2687.50

90

$5009.50

$80,152.00

Total Burden
Costs

Total Burden
Costs (All
Respondents)

In cases in which Number of Hourly Labor Burden
HHS could
Hours
potentially require Employees Costs (Hourly
clarification
rate + 35%
Fringe benefits)
Compliance
2
1
$53.75
Officer

$107.00

17

Total (based on 20
QHP issuers each
year)

40

$107.00

$1,075.00

ICRs Regarding Administrative Review of QHP Issuer Sanctions in a Federally-facilitated
Exchange (§156.901 to §156.963)
We base our burden estimate on the assumptions that one issuer will be subject to a CMP and that one
issuer will have a QHP that it offers in an FFE decertified. We assume that the issuer in each case
will choose to exercise its right to a hearing and will submit a valid request for hearing. The hours
involved in preparing this request may vary; for the purpose of this burden estimate we estimate an
average of 24 hours will be needed: 10 hours for the compliance officer to gather and assemble the
necessary background materials described under §156.907, and prepare the written request (at $53.75
an hour), 12 hours for an attorney (at $90.14 an hour) to review the background materials and written
request and provide recommendations to the senior manager, and 2 hours for the senior manager (at
$77.00 an hour) to discuss and act upon the attorney’s recommendations and submit the written
request. We estimate that it will take 24 hours at a cost of $1,773.18 for an issuer to prepare and
submit a request for a hearing for a total of 48 hours and $3546.36 for each issuer subject to an
enforcement action under this scenario. This estimate includes any statement of good cause under
§156.805(e)(3) or request for extension under §156.905(b), if applicable. Because we only estimate
that one issuer per year would appeal a CMP and one issuer will have its QHP offered in an FFE
decertified, we do not include this burden estimate in our overall calculation of burden for this
proposed rule. This provision is exempt from the PRA under 44 U.S.C. 3502(3)(A)(i) since fewer than
10 entities are associated with this requirement.
Labor
Category

Compliance
Officer
Attorney
Senior Manager

Total (based on
one issuer will
be subject to a
CMP)

Number of Hourly Labor
Burden
Employees Costs (Hourly Hours
rate + 35%
Fringe benefits)
1
$53.75
10

Total Burden
Costs

Total Burden
Costs (All
Respondents)

$537.50

1

$90.14

12

$1081.68

1

$77.00

2

$154.00

24

$1773.18

$3546.36

18

ICRs Related to Quality Standards (§156.1105)
Section 156.1105 describes the information collection and disclosure requirements that pertain to the
approval of enrollee satisfaction survey vendors. The burden estimate associated with these
disclosure requirements includes the time and effort required for enrollee satisfaction survey vendors
to develop, compile, and submit the application information and any documentation necessary to
support oversight in the form and manner required by HHS. HHS refers survey vendors to OCN
0938-1221 to review the application. HHS is also developing a model enrollee satisfaction survey
vendor application that will include data elements necessary for HHS review and approval. In the
near future, HHS will publish the model application and will solicit public comment. At that time,
and per the requirements outlined in the PRA, we will estimate the burden on survey vendors for
complying with this provision of the regulation. We solicit comment on the burden for the
application and review process for these entities.
13. Capital Costs
There are no anticipated capital costs associated with these information collections.
14. Cost to Federal Government
The initial burden to the Federal government for the establishing the systems and policies associated
with this information collection is $272,850.00. The calculations for CCIIO employees’ hourly salary
was obtained from the OPM website: http://www.opm.gov/oca/10tables/html/dcb_h.asp.
Table 1
Administrative Burden Costs for the Federal Government Associated with the Program Integrity
NPRM
Task
Development of Program Integrity Information
Collections
15 GS-13: 15 x $42.66 x 200 hours

Estimated Cost

$127,980.00

Technical Assistance to States
15 GS-13: 15 x $42.66 x 200 hours

$127,980.00

Managerial Review and Oversight
2 GS-15: 2 x $59.30 x 150 hours

$16,890.00

Total Costs to Government

$272,850.00

15. Changes to Burden
There are no changes to burden. This is a new collection.
19

16. Publication/Tabulation Dates
TBD.
17. Expiration Date
Not applicable.
18. Certification Statement
There is no exception to the certification statement identified in Item 19, "Certification for Paperwork
Reduction Act Submissions," of OMB Form 83-I.

20