CMS 10377 - Student Health - 30-Day Supporting Statement 06-11-16 508

Supporting Statement – Part A

Supporting Statement For Paperwork Reduction Act Submissions
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 part A 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.
Under the student health insurance coverage final regulation at 77 FR 16453, student health
insurance coverage is a type of individual health insurance coverage provided pursuant to a
written agreement between an institution of higher education (as defined in the Higher
Education Act of 1965) and a health insurance issuer, and provided to students who are
enrolled in that institution and their dependents. In addition, student health insurance
coverage must not be made available other than in connection with enrollment as a student,
must not condition enrollment on any health status-related factor, and must satisfy any
additional requirements that may be imposed under state law.
The Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2017 final rule (2017 Payment Notice) provides that, for policy years
beginning on or after July 1, 2016, student health insurance coverage is exempt from the
actuarial value (AV) requirements under section 1302(d) of the Affordable Care Act, but must
provide at least 60 percent AV. The issuer must also specify in any plan materials
summarizing the terms of the coverage the AV of the coverage and metal level (or next lowest
metal level) the coverage would otherwise satisfy.

B. Justification
1 . Need and Legal Basis
Section 1560(c) of the Affordable Care Act provides that "Nothing in this title (or an
amendment made by this title) shall be construed to prohibit an institution of higher education
(as such term is defined for purposes of the Higher Education Act of 1965) from offering a
student health insurance plan, to the extent that such requirement is otherwise permitted under
applicable Federal, State, or local law." The Department has determined that this provision of
the Affordable Care Act provides HHS limited authority to exclude student health insurance
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plans from certain requirements of the Affordable Care Act that would, as a practical matter,
prohibit or inhibit the offering of such coverage.
As part of the student health insurance coverage final regulation at 77 FR 16453, student
health insurance issuers were required to provide notice to students that their plan does not
meet the annual limits requirements under PHS Act section 2711. Specifically,
§147.145(b)(2) discussed how student health insurance issuers may impose restricted annual
dollar limits for policy years beginning before January 1, 2014, and §147.145(d) directed
student health insurance issuers to provide notice regarding the restrictions for annual dollar
limits. The 2017 Payment Notice removes these provisions which no longer apply, as student
health coverage is subject to the provisions in §147.126 that prohibit annual dollar limits for
policy years beginning on or after January 1, 2014. The notification requirement is therefore
being discontinued.
The 2017 Payment Notice further provides that student health insurance coverage is not
subject to the actuarial value requirements under section 1302(d) of the Affordable Care Act,
as implemented in §§156.135 and 156.140, for policy years beginning on or after July 1,
2016, but must provide an actuarial value of at least 60 percent. The final rule also requires
student health insurance issuers to specify in any plan materials summarizing the terms of the
coverage the actuarial value of the coverage and the metal level (or next lowest metal level)
the coverage would otherwise satisfy.
2.

Information Users
This information will allow students and their dependents to compare the generosity of the
student health insurance plan with other available coverage options, such as coverage under a
parent’s plan or coverage through the Marketplace, and choose a plan that best meets their
needs and budget. It will also enable institutions of higher education to arrange student health
insurance coverage.

3.

Use of Information Technology
Issuers may use electronic technology to incorporate the required AV and metal level
information into any plan materials summarizing the terms of the coverage and to distribute
those documents, consistent with applicable Federal and State law.

4.

Duplication of Efforts
This is the first of such requirements for student health insurance issuers to disclose the plans’
actuarial value and metal level (or next lowest metal level), thus there should be no
duplication of effort.

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5.

Small Businesses
Small businesses are not affected by this collection.

6.

Less Frequent Collection
If this information collection is conducted on a lesser frequency, students seeking to enroll in,
or required to have, student health insurance coverage would not be provided the opportunity
and information needed to compare and evaluate student health insurance coverage with other
available coverage options.

7.

Special Circumstances
There are no special circumstances.

8.

Federal Register/Outside Consultation
A Federal Register notice was published on March 11, 2016 (81 FR 12904), providing the
public with a 60-day period to submit written comments on the information collection
requirement (ICR). No comments were received.

9.

Payments/Gifts to Respondents
No payments or gifts are associated with this ICR.

10. Confidentiality
CMS will protect privacy of the information provided to the extent provided by law.
11. Sensitive Questions
This ICR involves no sensitive questions.
12. Burden Estimates (Hours & Wages)
Estimates of Annualized Burden Hours for the Notice Requirement (Total Hours, Wages,
Printing & Mailing)
The Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2017 final rule adds an exemption to the requirements for student health
insurance coverage, in which, for policy years beginning after July 1, 2016, student health
insurance coverage will be exempt from the actuarial value (metal level) requirements under
section 1302(d) of the Affordable Care Act. The rule also adds a requirement that issuers of
student health insurance coverage must specify in any plan materials summarizing the terms
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of the coverage the AV of the coverage and the metal level (or next lowest metal level) the
coverage would otherwise satisfy.
To derive average costs, we used data from the U.S. Bureau of Labor Statistics’ May 2015
National Occupational Employment and Wage Estimates for all salary estimates (http://
www.bls.gov/oes/current/oes_nat.htm). In this regard, the following table presents the
mean hourly wage, the cost of fringe benefits (calculated at 100 percent of salary), and the
adjusted hourly wage.
Annual Dollar Limit Notification
The Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2017 final rule discontinued the requirement that student health insurance
issuers provide notice informing students that the coverage does not meet the annual limits
requirements under PHS Act section 2711, as student health insurance coverage is subject to
the prohibition on annual dollar limits for policy years beginning or after January 1, 2014.
This results in a burden reduction of 1,071 hours per student health insurance issuer and a
reduction of $28,007.14 in associated wage and $15,750.00 mailing costs.
AV and Metal Level Disclosure
For policy years beginning on or after July 1, 2016, student health insurance issuers are
required to include in any plan materials summarizing the terms of the coverage information
specifying the plan’s AV and the metal level (or next lowest metal level) the coverage would
otherwise satisfy. We estimate that there are 49 issuers of student health insurance plans
that would need to provide an average of 25,612 notifications annually.1
Under §§ 147.150, 156.135, and 156.140, issuers offering non-grandfathered plans in the
individual and small group market are required to calculate a plan’s AV and its
corresponding metal level; thus there is no additional burden required for the issuers of
student health insurance coverage to determine these values as part of the 2017 Payment
Notice. This burden estimate encompasses the addition of language to specify, in plan
materials, the AV of the coverage and the metal level (or next lowest metal level) the
coverage would otherwise satisfy. We estimate that each student health insurance issuer will
require an average of one hour for clerical staff (at a labor cost of $33.18) to insert the AV
and metal level information into plan materials; resulting in a total time requirement of one
hour and an associated cost of $33.18 per issuer. For the 49 issuers currently providing
student health insurance, the total combined hour burden is estimated to be 49 hours with a
total combined cost of $1,625.82 annually.

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Estimate based on data from Medical Loss Ratio submissions for 2014 reporting year.

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12A. Estimated Annualized Burden Table
Forms
(If necessary)

AV and metal
level language
Total

Type of
Respondent

Number of
Respondents

Average
Burden per
Notice (sec)

49

Average
Number of
Notices per
Respondent
25,612

0.14

Average
Burden
Hours per
Respondent
1

Student Health
Plan Issuer

49

25,612

0.14

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12B. Cost Estimate: Actuarial calculation and inclusion in enrollment and plan documents
Type of
Respondent

Number of
Respondents

Student Health
Plan Issuer
Total

Average
Burden
Hours per
Respondent
1

Wage per
Hour
(including
fringe)
$33.18

Total Wage
Costs per Issuer

49

Average
Number of
Notices per
Respondent
25,612

49

25,612

1

$33.18

$1,625.82

$1,625.82

13. Capital Costs
The notification requirement requires that language be added to existing plan materials
summarizing the terms of the coverage. The addition of this language is expected to be limited
to one or two sentences indicating the plan’s AV and the metal level (or next lowest metal
level) the coverage otherwise would satisfy, which can be done at a negligible cost.
Additionally, this information will be included in existing enrollment materials and plan
documents so there will be no additional distribution costs. Therefore, additional capital costs
are not estimated.
14. Cost to Federal Government
There is no cost to the federal government.
15. Changes to Burden
Burden hours for the annual dollar limit notification have been reduced by 74,970 hours (to
zero) as this ICR has been discontinued. The burden hours for the AV and metal level
disclosure has increased by 49 hours (from zero) due to the new notice requirement. Therefore,
there is a net reduction in burden of 74,876 hours.
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16. Publication/Tabulation Dates
There are no publication or tabulation dates associated with this ICR.
17. Expiration Date
There is no expiration date for this ICR. .

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