CMS-10465 - MEC - Supporting Statement Part A Final

Supporting Statement – Part A
Minimum Essential Coverage
(CMS-10465/OMB Control Number: 0938-1189)
A. Background
The Patient Protection and Affordable Care Act, Pub. L. 111-148, was enacted on March 23,
2010 and the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, was
enacted on March 30, 2010 (collectively known as the “Affordable Care Act”). The
Affordable Care Act reorganizes, amends, and adds to the provisions of title XXVII of the
Public Health Service Act (PHS Act) relating to group health plans and health insurance
issuers in the group and individual markets.
Section 1501 of the Affordable Care Act adds section 5000A to the Internal Revenue Code
(IRC), which requires that individuals maintain minimum essential coverage, qualify for an
exemption, or make a shared responsibility payment with their federal income tax return for
coverage years prior to 2019. Under the Tax Cuts and Jobs Act, which was enacted on
December 22, 2017, the individual shared responsibility payment was reduced to $0,
effective for months beginning after December 31, 2018. 1 IRC section 5000A(f) designates
certain types of coverage as minimum essential coverage. In addition, IRC section
5000A(f)(1)(E) directs the Secretary of Health and Human Services (HHS), in coordination
with the Secretary of the Treasury, to recognize other health benefits coverage as minimum
essential coverage for purposes of their enrollees satisfying the minimum coverage
requirement. The final rule titled “Patient Protection and Affordable Care Act; Exchange
Functions: Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage
Provisions” published July 1, 2013 (78 FR 39494) designates certain types of existing
coverages as minimum essential coverage. Other coverages, not statutorily designated and
not designated as minimum essential coverage in regulation, may be recognized as minimum
essential coverage if certain substantive and procedural requirements are met.
B. Justification
1.

Need and Legal Basis
The final rule specifically designates certain types of coverage, which have not been
designated in the statute, as minimum essential coverage. In addition, the final rule outlines
a process by which other types of coverage can seek to be recognized as minimum essential
coverage. To be recognized as minimum essential coverage, the coverage must offer
substantially the same consumer protections as those enumerated in the Title I of Affordable

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Although the individual shared responsibility payment was reduced to $0, several important consumer protections
continue to exist for individuals who are enrolled in coverage that is recognized as MEC, that do not exist for
individuals who are enrolled in non-MEC plans. For example, individuals who lose MEC are entitled to a special
enrollment period (SEP) during which they can request enrollment in individual market health insurance coverage
any time between 60 days before and 60 days after losing that coverage, instead of being able to request enrollment
in such coverage only during the annual open enrollment period of November 1 to December 15 each year. Also,
eligibility for certain other SEPs are contingent upon an individual having prior MEC, such as the SEPs for
individual health insurance coverage that are created upon marriage, and upon gaining access to new individual
health insurance plans as a result of a permanent move (45 CFR 155.420, 45 CFR 147.104).
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Care Act relating to non-grandfathered, individual health insurance coverage to ensure
consumers are receiving adequate coverage.
The final rule requires sponsors of other coverage that seek to have such coverage
recognized as minimum essential coverage to adhere to certain procedures. They will have
to submit to HHS electronically the following information: (1) name of the organization
sponsoring the plan; (2) name and title of the individual who is authorized to make, and
makes, this certification on behalf of the organization; (3) address of the individual named
above; (4) phone number of the individual named above; (5) number of enrollees; (6)
eligibility criteria; (7) cost sharing requirements, including deductible and out-of-pocket
maximum; (8) essential health benefits covered; and (9) a certification that the plan
substantially complies with the provisions of Title I of the Affordable Care Act applicable to
non-grandfathered individual health insurance coverage and any plan documentation or
other information that demonstrate that the coverage sponsored by the organization
substantially complies with these provisions.
The final rule also requires that sponsors whose health coverage are recognized as minimum
essential coverage will have to provide a notice to enrollees informing them that the plan has
been designated minimum essential coverage for the purposes of the individual shared
responsibility provision of the Internal Revenue Code. The notice requirement may be
satisfied by inserting a statement into existing plan documents. Plan documents are usually
reviewed and updated annually before a new plan year begins. Sponsors may insert the
statement in their plan documents at that time at minimal cost. Once the notice is included
in plan documents in the first year, no additional cost will be incurred in future years.
Therefore this notice is not subject to the Paperwork Reduction Act of 1995.
2.

Information Users
CMS will need the information in this collection to determine whether the plan sponsored by
the requesting sponsor may be recognized as minimum essential coverage. CMS will
maintain a public list of the types of coverage that have submitted this information and have
been determined by the Secretary to meet the requirements to be recognized as minimum
essential coverage. Consumers will also need to know that the types of coverage they are
enrolled in are recognized as minimum essential coverage.

3.

Use of Information Technology
Requesting sponsors are expected to submit the information to CMS electronically.

4.

Duplication of Efforts
Plan sponsors seeking MEC recognition are currently required to submit the required
materials and disclosures, so there is no duplication of efforts.

5.

Small Businesses
Small businesses are not affected by this collection.

6.

Less Frequent Collection
This information will be provided to CMS at the time of the initial request and if there are
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any changes to the coverages at a later date. If sponsors do not submit this information,
CMS will not be able to determine whether these types of coverage may be recognized as
minimum essential coverage. In addition, if consumers are not provided with a notice of
minimum essential coverage status, they would not be aware that the types of coverage in
which they are enrolled are recognized as minimum essential coverage.
7.

Special Circumstances
There are no special circumstances.

8.

Federal Register/Outside Consultation
A Federal Register notice was published on December 18, 2018 (83 FR 64843), providing
the public with a 60-day period to submit written comments on the ICRs. No comments
were received.

9.

Payments/Gifts to Respondents
No payments or gifts are associated with these ICRs.

10. Confidentiality
CMS will protect privacy of the information provided to the extent provided by law.
11. Sensitive Questions
These ICRs involve no sensitive questions.
12. Burden Estimates (Hours & Wages)
Organizations that currently provide other types of health coverage that are not designated
by statute or regulation as minimum essential coverage may submit a request to CMS that
their coverage be recognized as minimum essential coverage. Organizations that make
substantial changes to health coverage previously recognized as minimum essential
coverage must also reapply for continued recognition of their coverage. Sponsors will have
to electronically submit to CMS information regarding their plans and certify that their plans
meet substantially all of the requirements in the Title I of Affordable Care Act applicable to
non-grandfathered, individual health insurance coverage. We anticipate that, on average, 10
sponsors will submit such a request each year. Average labor costs (doubled to include
fringe benefits and other associated costs) are calculated using data available from the
Bureau of Labor Statistics. 2
Adjusted Hourly Wages Used in Burden Estimates

2

May 2017 Occupational Employment Statistics found at https://www.bls.gov/oes/current/oes_nat.htm). To account
for fringe and overhead, HHS is using 100% of the mean hourly wage.
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Occupation Title

Occupational
Code

Mean
Hourly
Wage
($/hour)

Fringe
Benefits and
Overhead
($/hour)

Adjusted
Hourly
Wage
($/hour)

43-6014
11-3121
23-1011
11-1011

$17.75
$59.38
$68.22
$94.25

$17.75
$59.38
$68.22
$94.25

$35.50
$118.76
$136.44
$188.50

Secretaries and Administrative
Assistants, Except Legal, Medical,
and Executive
Human Resources Manager
Lawyer
Chief Executives

The burden associated with this certification includes the time needed to collect and input
the necessary plan information and to retain a copy for recordkeeping by clerical staff and
for a manager and legal counsel to review it and for a senior executive to review and sign it.
The certification and attachments will be submitted to CMS electronically at minimal cost.
We estimate that it will take a combined total of 5.25 hours (4 hours for clerical staff at an
hourly cost of $35.50, 0.5 hours for a human resource manager at an hourly cost of $118.76,
0.5 hours for legal counsel at an hourly cost of $136.44 and 0.25 hours for a senior executive
at an hourly cost of $188.50) to prepare and submit the information and certification to CMS
and to retain a copy for recordkeeping purposes. The total cost for one sponsor is estimated
to be approximately $317. The sponsor will need to submit this certification to CMS only
once and will need to resubmit it only if there is any change in coverage. Therefore, the
total burden for 10 sponsors will be 52.5 hours, with an equivalent cost of approximately
$3,167.
Table 12.1 Estimated Burden Hours for Minimum Essential Coverage Certification

Type of Form

Number of
Respondents

Number
of Reports

Total
Estimated
Burden Hours

Burden Cost
Per
Respondent

Certification

10

1

52.5

$2,952

13. Capital Costs
Sponsors are not expected to incur capital costs to fulfill these requirements.
14. Cost to Federal Government
CMS staff is expected to review the information submitted by requesting sponsors. We
anticipate that a reviewer will need 3 hours to review each submission.
Table 14.1 Estimated Cost to Federal Government

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Type of
Federal
Employee
Support
Review of
MEC
Application
Materials

Total Burden
Hours per
Reviewer

Total
Reviewers

Hourly Wage Rate
(GS 14 equivalent)
– (includes fringe)

Total Federal
Government
Costs

30 hours

1

$109.82

$ 3,295

Hourly rate is based on a 14 Grade/Step 1 in the Washington DC area.
15. Changes to Burden
There are no changes in burden hours.
16. Publication/Tabulation Dates
CMS will publish a list of those plans that have applied for and received MEC recognition at
https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/
minimum-essential-coverage.html.
17. Expiration Date
The expiration date will be displayed on the first page of each instrument (top, right-hand
corner).

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