CMS-10448 - Supporting Statement for Essential Health Benefits Benchmark Plans

Supporting Statement for Essential Health Benefits Benchmark Plans
(CMS-10448/OMB control number: 0938-1174)
A.

Background

On March 23, 2010, the Patient Protection and Affordable Care Act (PPACA; P.L. 111-148) was signed
into law, and on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (P.L. 111152) was signed into law. The two laws implement various health insurance policies, including the
essential health benefits (EHB). Beginning in 2014, all non-grandfathered health plans in the individual
and small group market must cover the EHB, as defined by the Secretary of Health and Human
Services. The PPACA directs that the EHB reflect the scope of benefits covered by a typical employer
plan and cover at least the following 10 general categories of items and services:
(1) Ambulatory patient services.
(2) Emergency services.
(3) Hospitalization.
(4) Maternity and newborn care.
(5) Mental health and substance use disorder services, including behavioral health treatment.
(6) Prescription drugs.
(7) Rehabilitative and habilitative services and devices.
(8) Laboratory services.
(9) Preventive and wellness services and chronic disease management.
(10) Pediatric services, including oral and vision care.
Pursuant to Section 1302 of the PPACA and Section 2707 of the Public Health Service
Act, as amended by section 1201 of the PPACA, CMS released a bulletin on December 16, 2011 (EHB
Bulletin) 1 describing its intent to define EHB by reference to a State-specific benchmark plan. That
policy was finalized in the rule Patient Protection and Affordable Care Act; Standards Related to
Essential Health Benefits, Actuarial Value, and Accreditation; Final Rule (EHB Final Rule) (78 FR
12834), published on February 25, 2013. 2 In order to establish an EHB-benchmark plan in each State,
in 2012, CMS asked States to voluntarily identify an EHB-benchmark plan from 10 options that were
provided in the EHB Bulletin. The EHB Final Rule applied those benchmark plans starting in the 2014
plan year as a transitional policy. Then, in 2015, CMS asked States to voluntarily identify an EHBbenchmark plan from those 10 options for a second time based on 2014 plans that would apply
beginning in the 2017 plan year.
In the proposed rule entitled the HHS Notice of Benefit and Payment Parameters for 2019 (2019
Proposed Payment Notice; CMS-9930-P), 3 we propose to change the State’s EHB-benchmark plan
selection process starting in 2019. We propose that for plan years beginning on or after January 1,
2019, subject to proposed §156.111(b), (c), (d) and (e), a State may change its EHB-benchmark plan
by:
1

http://www.cms.gov/CCIIO/Resources/Files/Downloads/essential_health_benefits_bulletin.pdf
https://www.gpo.gov/fdsys/pkg/FR-2013-02-25/pdf/2013-04084.pdf
3
A copy of the proposed rule is posted on CCIIIO’s website at: https://www.cms.gov/CCIIO/Resources/Regulations-andGuidance/index.html.
2

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(1) Selecting the EHB-benchmark plan that another State used for the 2017 plan year under
§156.100 and §156.110;
(2) Replacing one or more categories of EHBs under §156.110(a) of this subpart under its EHBbenchmark plan used for the 2017 plan year with the same category or categories of EHB from the
EHB-benchmark plan that another State used for the 2017 plan year under §156.100 and §156.110; or
(3) Otherwise selecting a set of benefits that would become the State’s EHB-benchmark plan,
provided that the new EHB-benchmark plan does not exceed the generosity of the most generous
among a set of comparison plans, including: the State’s EHB-benchmark plan used for the 2017 plan
year, and any of the State’s base-benchmark plan options used for the 2017 plan year described in
§156.100(a)(1), supplemented as necessary under §156.110.
To reflect this proposed change, CMS now wishes to revise the existing information collection
requests (ICRs), OMB control number 0938-1174, in order to reflect the proposed policy to obtain
information for when a State is changing its EHB-benchmark plan selection. We are also including
estimates to the stand-alone dental plan (SADP) voluntary reporting information collection that is also
covered in the OMB control number noted above.
B.
1.

Justification
Need and Legal Basis

Section 1301 of the PPACA requires that all non-grandfathered individual and small group health
plans provide EHB, as defined by the Secretary. Section 1321(a) requires HHS to issue regulations
setting standards for meeting the requirements under title I of the PPACA. On June 5, 2012, HHS
published Data Collection to Support Standards Related to Essential Health Benefits; Recognition of
Entities for the Accreditation of Qualified Health Plans (77 FR 33133), initially authorizing CMS to
collect data from potential default EHB-benchmark plan issuers in each State. The information
collection requirement (ICR) associated with that proposed rule addressed States’ selection of their
own benchmark plan. The proposed rule was finalized and published on July 20, 2012 at 77 FR
42658. A revised ICR was published with the HHS Notice of Benefit and Payment Parameters for
2016 (CMS-9944-P and CMS-9937-F) and the ICR was finalized on August 28, 2015. We propose
to revise this ICR requesting a 60-day public comment process as part of the 2019 Proposed Payment
Notice, which also proposes to add one new EHB sections to the regulation at §156.111.
In accordance with the proposals included in §156.111(e), for plan years beginning on or after
January 1, 2019, a State changing its EHB-benchmark plan using one of the proposed options at
§156.111(a) must submit documents specified by HHS in a format and manner by a date determined
by HHS. These documents would be required to include:
(1) A document confirming that the State’s EHB-benchmark plan definition complies with the
requirements under paragraphs (a), (b) and (c), including information on which selection option under
proposed §156.111(a) the State is using, and whether the State is using another State’s EHB-benchmark
plan;
(2) If the State is selecting its EHB-benchmark plan using the options proposed at §§156.111
(a)(2) or (a)(3), an actuarial certification and an associated actuarial report from an actuary, who is a
2

member of the American Academy of Actuaries, in accordance with generally accepted actuarial
principles and methodologies that affirms: that the State’s EHB-benchmark plan definition is equal in
scope of benefits provided under a typical employer plan; and if the State is selecting its EHBbenchmark plan using the option proposed at §156.111(a)(3) of this section, that the new EHBbenchmark plan does not exceed the generosity of the most generous among the plans listed at
§156.111(a)(3)(i) and (ii);
(3) The State’s EHB-benchmark plan document that reflects the benefits and limitations,
including medical management requirements, a schedule of benefits and, if the State is selecting its
EHB-benchmark plan using option proposed at §156.111(a)(3), a formulary drug list in a format and
manner specified by HHS; and
(4) Other documentation specified by HHS, which is necessary to operationalize the State’s
EHB-benchmark plan.
Unlike the previous ICR, a response is not needed for all States. Only States choosing to modify
the State’s EHB-benchmark plan would need to respond to this ICR. However, the number and
types of documents needed in the proposed ICR differ from the previous ICR. This information
collection proposes to use collection instruments that are attached to the proposed PRA in
addition to requiring the State to submit the same documentation in the previous ICR. We
propose collections instruments for certain documents in this ICR and for other documents in this
ICR, we do not have collection instruments. For these documents without collection instruments,
the State could submit these documents in a PDF or word processing format. States would
submit these documents electronically. We are considering using a web based tool to collect
these documents with e-mail as back up option, and we believe that the burden would be the
same for collecting all of these documents in a web tool or via email.
2.

Information Uses

There are no other ICRs that obtain the information in this ICR or cover this requirement. The
benchmark plan information in this ICR is used by CMS, issuers, and consumers to establish the
benefits covered by benchmark plans in each State as EHB. This allows issuers seeking to offer
coverage in the individual and small group markets to design benefits that meet EHB requirements
and each State’s EHB-benchmark plan determines EHB for the purposes of the availability of
premium tax credits and cost-sharing reductions for enrollees in the State. 4 This information
collection also covered stand-alone dental plans. This information is used to inform CMS and States,
as well as Exchanges, in their efforts to ensure plans are meeting EHB requirements for qualified
health plan (QHP) certification and EHB compliance. Some documents collected in this information
collected will be posted (see Section 3 below).
3.

Use of Information Technology

4

The definition of EHB also has an impact on the annual limitation on cost sharing at section 1302(c) of the PPACA (which
is incorporated into section 2707(b) of the PHS Act) and the prohibition of annual and lifetime dollar limits at section
2711of the PHS Act, as added by the PPACA.

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The documents need to be submitted electronically. Specifically, we are considering using a web
based tool with e-mail as back up option. Much of the information in this information collection
will be posted on Center for Consumer Information and Insurance Oversight (CCIIO) webpage
on the essential health benefits, similar to what is currently available on CCIIO’s webpage. 5
4.

Duplication of Efforts

There is no duplication of efforts. States’ EHB-benchmark plan information will only be collected
through this method.
5.

Small Businesses

Small businesses are not significantly affected by this collection.
6.

Less Frequent Collection

We anticipate that the EHB-benchmark plan data collection will occur annually. The respondents will
likely be different respondents each year. If the collection was less frequently, it would decrease the flexibility for States
on when they could choose to make changes to their EHB-benchmark plans.
7.

Special Circumstances

There are no special circumstances.
8.

Federal Register/Outside Consultation

As required by the Paperwork Reduction Act of 1995 (44 U.S.C.2506 (c)(2)(A)), CMS is
publishing this notice in the Federal Register requesting a 60-day public comment process in the
2019 Proposed Payment Notice. This notice proposes to amend the ICR for establishing a State’s
EHB-benchmark plan. This proposed rule is also soliciting comments on proposals at §156.111 that
proposes to change the State selection of EHB-benchmark plan for plan years beginning on or
after January 1, 2019 and the collection of data to define essential health benefits for plan years
beginning on or after the January 1, 2019.
No additional outside consultation was sought.
9.

Payments/Gifts to Respondents

No payments or gifts were made to any respondents.
10.

Confidentiality

CMS intends to post some of the proposed documents collected through this data collection in a
similar manner and format to the previous documents that CMS currently provides on States’ EHB5

The current CCIIO webpage for EHB benchmark plans is available at: https://www.cms.gov/CCIIO/Resources/DataResources/ehb.html.

4

benchmark plans. This includes the plan documents under proposed §156.111(e)(3) and other
documentation necessary to operationalize the State’s EHB-benchmark plan definition under
proposed §156.111(e)(4) that include the State’s EHB summary chart. CMS is also soliciting
comments on whether to publish one of the new documents that is being collected in this data
collection at §156.111(e)(1).
11.

Sensitive Questions

No sensitive questions are asked in this data collection.
12.

Burden Estimates (Hours & Wages)

The following sections of this document contain estimates of the burden imposed by the incorporated
ICRs, but this burden estimate does not include estimate for a State to conduct reasonable public
notice and an opportunity for public comment as proposed at proposed §156.111(c). Average labor
costs (including 100 percent fringe benefits) used to estimate the costs are calculated using data
available from the May 2016 National Industry-Specific Occupational Employment and Wage
Estimates (Bureau of Labor Statistics (BLS)
(https://www.bls.gov/oes/current/naics4_999200.htm#11-0000).
Burden on States
Under the previous benchmark plan selection policy, 29 States selected one of the 10 base benchmark
plan options and 22 States defaulted and that policy did not allow for States to make an annual
selection. The proposed regulation would allow States to modify their EHB-benchmark plans
annually, but would not require them to respond to this ICR for any year for which they did not
change their EHB-benchmark plans. As such, for purposes of this proposed regulation, we estimate
that 10 States would choose to make a change to their EHB-benchmark plans in any given year (for a
total of 30 States over 3 years within the authorization of this ICR) and would respond to this ICR.
The following details the burden attached to part of this information collection.
The proposals at §156.111(e)(1) would require the State to provide a document confirming that the
State’s EHB-benchmark plan selection definition complies with certain requirements, including
those under proposed §156.111(a), (b), and (c). To collect this information, the State would be
expected to submit the associated document in Appendix A. To complete this requirement, we
estimate that a financial examiner would require 4 hours (at a rate of $66.04 per hour) to fill out,
review, and transmit a complete and accurate document. We estimate that it would cost each
State approximately $264 to meet this reporting requirement, with a total annual burden for all 10
States of 40 hours and an associated total cost of $2,642.
The proposals in §156.111(e)(2) would further require the State to submit an actuarial certification and
associated actuarial report of the methods and assumptions when selecting proposed options under
§156.111(a)(2) and (3). Specifically, the actuarial certification that is being collected under this ICR
would be required to include an actuarial report that complies with generally accepted actuarial
principles and methodologies. This would include complying with all applicable Actuarial Standards
of Practice (ASOPs) (including but not limited to ASOP 41 on actuarial communications). For
example, ASOP 41 on actuarial communications includes complying with required disclosure
5

requirements, including those that apply to the disclosure of information on the methods and
assumptions being used for the actuarial certification and report. The actuarial certification for this
proposed requirement is provided in a template and includes an attestation that the standard actuarial
practices have been followed or that exceptions have been noted. The signing actuary would be
required to be a Member of the American Academy of Actuaries. We are also seeking comment on a
draft document entitled Draft Example of an Acceptable Methodology for Comparing Benefits of a
State’s EHB-benchmark Plan Selection to Benefits of a Typical Employer Plan As Proposed under the
HHS Notice of Benefit and Payment Parameters for 2019 (CMS-9930-P) that would provide an
example of a method an actuary could use to develop the actuarial certification and report. 6
We estimate that an actuary, who is a member of the American Academy of Actuaries, would require
16 hours (at a rate of $80.82 per hour) on average for §156.111(e)(2). This would include the
certification and associated actuarial report from an actuary to affirm, in accordance with generally
accepted actuarial principles and methodologies that the State’s EHB-benchmark plan definition is
equal in scope of benefits provided under a typical employer plan. Additionally, this estimate of 16
hours would also apply if the State is selecting its EHB-benchmark plan using the option proposed at
§156.111(a)(3). The option proposed at §156.111(a)(3) would also require the actuary to affirm that
the State’s selected EHB-benchmark plan does not exceed the generosity of the most generous among a
set of comparison plans proposed at §156.111(a)(3), including the State’s EHB-benchmark plan used
for the 2017 plan year and any of the State’s base-benchmark plan options used for 2017 plan year
described in §156.100(a)(1), supplemented as necessary under §156.110. For these calculations, the
actuary would need to conduct the appropriate calculations to create and review an actuarial
certification and associated actuarial report, including minimal time required for recordkeeping. The
precise level of effort for the actuary certification and associated actuarial report under §156.111(e)(2)
is likely to vary depending on the State’s approach to its EHB-benchmark plan and this certification
requirement. For example, the State may only need to do one plan comparison for the purposes of both
of these proposed certification requirements. Specifically, the State could use the same plan, such as
the State’s EHB-benchmark plan used for 2017 plan year, to determine that the new State’s EHBbenchmark plan is equal in scope of benefits provided under a typical employer plan. The State could
also use those findings to determine that because the new State EHB-benchmark plan is equal in scope
of benefits to the State’s EHB-benchmark plan used for the 2017 plan year, the ne State’s EHBbenchmark plan does not exceed the generosity of the most generous of a set of comparison plans. For
the actuarial certification, we provide the template for that document in Appendix B. We estimate that a
financial examiner would require one hour (at a rate of $66.04 per hour) to review, combine, and
electronically transmit these documents to HHS, as part of a State’s EHB-benchmark plan submission.
Because this section of the proposed regulation would only apply to options 2 and 3 under proposed
§156.111(a)(2) and (3), we are estimating that only two thirds of States (7 of the 10 States) would need
to complete and submit this proposed documentation requirement. Therefore, we estimate that each
State would incur a burden of 17 hours with an associated cost of $1,359, with a total annual burden for
7 states of 119 hours at associated total cost of $9,514. We seek comment on this estimate.
The proposals at §156.111(e)(3) would further require each State to submit its new EHB-benchmark
plan documents. The level of effort associated with this requirement could depend on the State’s
6
The Draft Example of an Acceptable Methodology for Comparing Benefits of a State’s EHB-benchmark Plan Selection to
Benefits of a Typical Employer Plan As Proposed under the HHS Notice of Benefit and Payment Parameters for 2019
(CMS-9930-P) is available on CCIIO’s Regulation and Guidance webpage at
https://www.cms.gov/cciio/resources/regulations-and-guidance/index.html.

6

selection of the EHB-benchmark plan options under the proposed regulation at §156.111(a). However,
for the purposes of this estimate, we estimate that it would require a financial examiner (at a rate of
$66.04 per hour) 12 hours on average to create, review, and electronically transmit the State’s EHBbenchmark plan document that accurately reflects the benefits and limitations, including medical
management requirements and a schedule of benefits, resulting in a burden of 12 hours and an
associated cost of $792, with a total annual burden for all 10 states of 120 hours and an associated cost
of $7,925. The burden for producing these documents is significantly higher than previous estimates
because the previous data collection generally only required the State (or issuer) to transmit the selected
benchmark plan document. In contrast, in some cases, the proposed §156.111(a) may result in the State
needing to create a completely new document or significantly modify the current document to represent
the plan document. Additionally, this estimate of 12 hours also includes the burden necessary for a
State selecting the option at propose §156.111(e)(3) where the State would also be required to submit a
formulary drug list for the State’s EHB-benchmark plan in a format and manner specified by HHS.
Specifically, the burden for the State selecting this option would also likely vary as the State could use
an existing formulary drug list or create its own formulary drug list separately for this purpose. To
collect the formulary drug list, the State would be required to use the template provided by HHS and
must submit the formulary drug list as a list of RxNorm Concept Unique Identifiers (RxCUIs). This
template is incorporated in Appendix A.
Lastly, the proposals at §156.111(e)(4) would require the State to submit the documentation necessary
to operationalize the State’s EHB-benchmark plan definition. This reporting requirement includes the
EHB summary file that is currently posted on CCIIO’s website and is used as part of the QHP
certification process and is integrated into HHS’s IT Build systems that feeds into the data that is
displayed on HealthCare.gov. 7 This document format is incorporated as a template in Appendix A.
While this document would not be a new document, the burden associated with this document would be
new for States. We estimate that it would require a financial examiner 12 hours, on average, (at a rate
of $66.04 per hour) to create, review, and electronically submit a complete and accurate document to
HHS resulting in a burden of 12 hours and an associated cost of $792, with a total annual burden for all
10 states of 120 hours and an associated cost of $7,925.
We estimate that the total number of respondents would be 10 per year, for a total yearly burden
of 399 hours and an associated cost of $28,005 to meet these reporting requirements. Below is
the estimate of the burden imposed on a State subject to the reporting requirements of this
proposed rule. We solicit comments on these proposed estimates.
Proposed Annual Recordkeeping and Reporting Requirements
Regulation
Section(s)

OMB control
number

Respondents

Responses

Burden
per
Response
(hours)

Total
Annual
Burden
(hours)

Labor
Cost of
Reporting
($)

Total Cost
($)

§156.112(a)
(1)

0938-1174

10*

10

4

40

$2,641.60

$2,641.60

7

https://www.cms.gov/CCIIO/Resources/Data-Resources/ehb.html.

7

Regulation
Section(s)

OMB control
number

Respondents

Responses

Burden
per
Response
(hours)

Total
Annual
Burden
(hours)

Labor
Cost of
Reporting
($)

Total Cost
($)

§156.112(a)
(2)

0938-1174

7*

7

17

119

$9,514.12

$9,514.12

§156.112(a)
(3)

0938-1174

10*

10

12

120

$7,924.80

$7,924.80

§156.112(a)
(4)

0938-1174

10*

10

12

120

$7,924.80

$7,924.80

--

10

37

40

399

$28,005.32

$28,005.32

Total

* Denote the same entities. For purposes of calculating the total, value is used only once.
Burden on Stand Alone Dental Plan Issuers
CMS is requesting that issuers that intend to offer stand-alone dental plans in any Exchange notify
CMS of their intent to participate. This collection includes data on whether the issuer intends to offer
stand-alone coverage, the anticipated Exchange market in which coverage would be offered, and the
State and service area in which the issuer offers coverage. The burden associated with meeting this
requirement includes the time and effort needed by the issuer to report on whether it intends to offer
stand-alone dental coverage. We estimate that it will take one half hour for a health insurance issuer to
meet this reporting requirement. We estimate that approximately 175 issuers will respond to this data
collection. Therefore, we anticipate that the reporting requirement will require a market research analyst
one half-hour annually to identify and submit the responsive records to CMS (at $67.90 per hour), for a
total cost of $33.95 a year per reporting entity. The total number of respondents will be 175, for a total
burden of $5,941.
Below is the estimate of the burden across all respondents that we estimate will respond to the
reporting request.

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Labor
Category

Number of
Respondents

Hourly Labor
Costs

Burden
Hours

Total Burden
Cost per
Respondent

Total Burden
Costs (All
Respondents)

Issuer or
State
Market
research
analyst

175

$67.90 8

0.5

$33.95

$5,941

Hourly rate of $33.95 for market research analyst https://www.bls.gov/oes/current/oes131161.htm

8

Labor
Category

Number of
Respondents

Hourly Labor
Costs

Annual burden
hours

13.

Burden
Hours

Total Burden
Cost per
Respondent

Total Burden
Costs (All
Respondents)

88

Capital Costs

There are no anticipated capital costs associated with this data collection.
14.

Cost to Federal Government

There are no additional costs to the Federal government.
15.

Changes to Burden

The total burden hours have increased by 322 hours (from 165 hours to 487 hours). However, the
existing ICR assumes burden for 226 respondents and the proposed ICR estimates 185 respondents
per year due to certain issuers and States no longer being required to respond to the information
collection. The total costs for proposed §156.111(e) per year is estimated to increase by $19,911
from $8,094 to $28,005 and the stand-alone dental plan data collection is estimated as $5,941 total
costs per a year. The burden related to SADP issuers has risen due to increased fringe and overhead
costs while the number of participating issuers remains the same at 175 issuers.
16. Publication/Tabulation Dates
Yes, certain documents covered under this information collection will be posted on the Center for
Consumer Information and Insurance Oversight’s (CCIIO) website at some point after the annual
deadline for State submission for its EHB-benchmark plan.
17.

Expiration Date

The expiration date and OMB control number will be displayed on the first page of each instrument
(top, right-hand corner).

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