CMS-10657 - Supporting Statement - 30-day

Supporting Statement for the Information Collection Requirements Contained in the State Flexibility
to Stabilize the Market Grant Program
CMS 10657/OMB Control Number: 0938-NEW
A.

Justification

1. Circumstances Making the Collection of Information Necessary
Grants to Support States in Providing Added Flexibility to Strengthen the Private Health Insurance
Market through Implementation of Market Reforms under Part A of Title XXVII of the Public Health
Service Act
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act
and on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 was also signed into
law (collectively referred to as “PPACA”).
The PPACA includes a number of provisions that reform the health insurance market and provide
Federal consumer protections through amendments to Title XXVII of the Public Health Service Act (PHS
Act) and corresponding amendments to the Employee Retirement Income Security Act and the Internal
Revenue Code. The PPACA also includes significant grant funding for States to work with the Federal
government to implement the market reforms.
Section 1003 of the PPACA adds a new section 2794 to the PHS Act entitled, “Ensuring That Consumers
Get Value for Their Dollars.” Specifically, section 2794(a) requires the Secretary of the Department of
Health and Human Services (the Secretary) (HHS), in conjunction with the States, to establish a process
for the annual review of health insurance premiums to protect consumers from unreasonable rate
increases. Section 2794(c) directs the Secretary to carry out a program to award grants to States.
Congress appropriated $250 million to be awarded in Federal fiscal years (FFYs) 2010 through
2014 for the Rate Review Grant Program. Through 2010-2014, there were four cycles of Rate
Review Grants awarded. Section 2794(c)(2)(B) specifies that if there are any appropriated Rate Review
Grant funds that are not fully obligated by the end of FY14, such amounts shall remain available to the
Secretary for grants to States for planning and implementing the insurance market reforms and
consumer protections under Part A of title XXVII of the PHS Act.
The provisions in Part A of title XXVII of the PHS Act include market-wide reforms in the group and
individual private health insurance markets intended to protect consumers, increase transparency, and
regulate health insurance industry practices.
One of the goals of the State Flexibility to Stabilize the Market Grant Program (hereafter referred to as
“State Flexibility Grants” or “State Flexibility Grant Program”) is to enhance the States’ ability to
effectively regulate their respective health insurance markets through innovative measures that support
the pre-selected market reforms and consumer protections under Part A of Title XXVII of the PHS Act.
Many of the market reforms and consumer protections in Part A of title XXVII of the PHS Act are new
provisions that became effective for plan years beginning in 2014. The State Flexibility Grant Program
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will provide a funding source to enhance the role of States in planning and implementing several of the
Federal market reforms and consumer protections, which are listed below. State Flexibility Grants will
provide States with the opportunity to ensure their laws, regulations, and procedures are in line with
Federal requirements, and enhance the States’ ability to effectively regulate their respective health
insurance markets through innovative measures that support the pre-selected market reforms and
consumer protections under Part A of Title XXVII of the PHS Act. The project period and funding
awarded to each recipient will be 24 months.
Funding under the State Flexibility Grant Program is available to States for activities related to planning
and implementing the following provisions of Part A of title XXVII of the PHS Act:
I.
II.
III.

Section 2702 – Guaranteed Availability of Coverage
Section 2703 – Guaranteed Renewability of Coverage
Section 2707 –Non-discrimination under Comprehensive Health Insurance Coverage
(Essential Health Benefits Package)

These pre-selected market reforms were chosen due to their relative complexity and the anticipated
benefits that these reforms will have on consumers and the premiums they pay. These also represent
areas that can help States assess the needs of consumers and support the development of innovative
measures to ensure access to affordable health coverage in their respective individual and small group
markets.
All fifty States and the District of Columbia are eligible to apply for planning and/or implementing one or
more of the three pre-selected market reforms and consumer protections in Part A of title XXVII of the
PHS Act. Only one application per State is permitted, except in a State in which there is more than one
regulating entity, each with a primary responsibility over the regulation of a portion of the private health
insurance market. States must ensure that they are only seeking funding to plan and implement
activities that they are not currently receiving Federal grant funding to plan and implement
Applicants may use grant funds for a variety of planning and implementation objectives related to the
pre-selected market reforms and consumer protections under Part A of title XXVII of the PHS Act,
including but not limited to implementing or enhancing policy form review, hiring or contracting with a
clinician to review formularies, developing actuarial and economic analyses, and performing market
scans of the respective State’s health insurance market to assess the current healthcare and coverage
landscape.
All applicants must submit a mandatory Letter of Intent by February 26, 2018. CMS uses this information
to determine the amount of funding available to each recipient. CMS will provide applicants with
information on their funding allocation prior to March 2, 2018.
Baseline funding for State Flexibility Grants consists of a minimum of approximately $156,000 for the
length of the award. Provided sufficient funds are available after providing each State with baseline
funding for a two-year project period, States may also receive supplemental awards called “Workload”
funds. Workload funds are determined based on the population and number of health insurance issuers
in the State. Following submission of the mandatory Letters of Intent, CMS will inform States of funding
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allocations, including whether baseline award amounts have increased and if there are sufficient funds
available for the “Workload”. The baseline funding formula will be consistent, regardless of the activities
for which a State applies for funds.
States that apply for funds are required to complete the grant application. The application for the State
Flexibility Grants is due on April 5, 2018. Grant awards are scheduled to be made approximately 60 days
after applications are due.
States that are awarded funds under this funding opportunity are required to provide the CMS with four
quarterly progress reports (per fiscal year), one annual report, and one final report, detailing the State’s
progression towards planning and/or implementing the pre-selected market reforms under Part A of
Title XXVII of the PHS Act.
2. Purpose and Use of Information Collection
The data collection (quarterly, annual, and final reports) are a source of information on the State’s
progress with meeting CMS expectations for the State Flexibility Grant Program. The reports describe
significant advancements towards the State’s goal of planning and/or implementing the pre-selected
PPACA market reform activities at the beginning from the time of approval through the completion of
the grant period. The data collection is imperative to CMS being able to assess the State’s progress,
barriers, and updates on measurable objectives. Without the data collection, CMS will be unable to
efficiently monitor the State’s progress. It will also inhibit CMS’ ability to support and share
opportunities of best practices with other States.
3. Use of Improved Information Technology and Burden Reduction
All reports (quarterly, annual, and final) will be submitted electronically by States via the Health
Insurance Oversight System (HIOS)—a web-based reporting and data collection system that is already
being used by States in both the Rate Review Grant and the Health Insurance Enforcement and
Consumer Protections Grant Programs. The burden estimates provided in this statement include the
time and effort that will be dedicated to uploading information in HIOS.
4. Efforts to Identify Duplication and Use of Similar Information
The information collected for the State Flexibility Grant Program is not duplicative of any information
already collected.
5. Impact on Small Businesses or Other Small Entities
Small businesses and other small entities are not affected by this information collection requirement
(ICR).
6. Consequences of Collecting the Information Less Frequent Collection

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As this grant is a multi-year award, collection at a frequency less than the quarterly, such as annual
reporting only, will put the Federal grant program at risk due to a lack of sufficient oversight.
7. Special Circumstances Relating to the Guidelines of 5 CFR 1320.5
No special circumstance.
8. Comments in Response to the Federal Register Notice/Outside Consultation
A Notice (83 FR 53474) was published in the Federal Register on 10/23/2018. No comments were
received.
9. Explanation of any Payment/Gift to Respondents
There will be no payments or gifts to respondents.
10. Assurance of Confidentiality Provided to Respondents
No personal health information will be collected. All information will be kept private to the extent
allowed by applicable laws/regulations.
11. Justification for Sensitive Questions
No sensitive information will be collected.
12. Estimates of Annualized Burden Hours (Total Hours & Wages)
TO DERIVE AVERAGE COSTS, WE USED DATA FROM THE U.S. BUREAU OF LABOR STATISTICS’ MAY 2017 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.
State Flexibility Grants Activities
The State Flexibility Grant will provide States with the opportunity to apply for funding to ensure their
laws, regulations, and procedures are in line with Federal requirements, and enhance the States’ ability
to effectively regulate their respective health insurance markets through innovative measures that
support the pre-selected market reforms and consumer protections under Part A of Title XXVII of the
PHS Act.
Once applicants are awarded grant funds, they are required to provide CMS with quarterly reports due
30 days after the quarter has ended for the entire duration of the grant. The quarterly reports allows
States to update CMS with the progression towards planning and/or implementing the pre-selected
PPACA market reforms. Grantees will identify significant events towards the goal in the grant progress
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reports, in addition to any barriers experienced and plans for rectifying any setbacks. States will also
provide an updated budget, work plan and timeline with updated progress towards each objective
outlined in the State’s application.
In addition, each grantee must provide CMS with an annual report. This report provides a yearly
summary of the progress made towards planning and/or implementing one or more of the three preselected PPACA market reforms. Finally, CMS requires a final report at the end of the grant period. This
report provides a cumulative summary of the progress made towards toward planning and/or
implementing the pre-selected PPACA market reforms.
THE STATE FLEXIBILITY GRANT PROCESS
12A. Estimated Annualized Burden Hours
Forms
(If necessary)

Type of
Respondent

Number of
Respondents

Number of
Responses
per
Respondent

Total
Estimated
Burden
Hours

Quarterly
Report

State
Government

31

4

12

1488

Annual Report

State
Government

31

1

20

620

Final Report

State
Government

31

1

20

620

5 per year
per grantee
(4 quarterly
reports, 1
annual
31 report, and
1 final
report at
the end of
the grant
period 1 )

32

2108

Total

1

Estimated
Burden
hours per
Response

The final report will be submitted in lieu of the annual report in the last year of the grant
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12B. Cost Estimate for All Respondents completing all Reporting Requirements, including the
quarterly, annual report, and one final report (Annualized).

Type of
respondent

Medical and
Health Services
Manager
(Occupation
Code: 11-9111)
Executive
Secretaries &
Executive
Administrative
Assistants
(Occupation
Code: 43-6011)

Average
Number of
Burden
Wage per
Responses
Number of
Hours
Hour
per
Respondents
per
Respondent
response

Burden
Costs
Total
Annualized
Response

Burden
Costs
Per
Annualized
Response

31

5

6.4

$107.38

$106,520.96

$3,436.16

31

5

6.4

$57.12

$56,663.04

$1,827.84

$163,184.00

$5,264.00

Total

12.8

The wage per hour is taken from the Bureau of Labor Statistics for (1) Medical and Health Service Manager; (1)
Executive Secretaries & Executive Administrative Assistants.

The State Flexibility Grant’s total burden hours for reporting are estimate to be 12.8. The total cost
associated with that estimate is $163,184.00.
13. Estimates of other Total Annual Cost Burden to Respondents or Record Keepers /Capital Costs
There are no additional record keeping/capital costs.
14. Annualized Cost to Federal Government
Total government program staffing costs include two GS-13 and one GS-12 with a break down as follows
to intake and review quarterly and final reports for an estimated 31 awardees.
GS-13: Full-time (Salary with local cost adjustment: $96,970)
GS-13: Full-time (Salary with local cost adjustment: $96,970)
GS-12: Full-time (Salary with local cost adjustment: $81,548)
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Annual cost:
Annual cost:
Annual cost:
Total:

$96,970
$96,970
$81,548
$275,488.00

The wage is taken from the 2018 OPM Washington, DC GS scale for (2) GS 13 and (1) GS 12.

15. Explanation for Program Changes or Adjustments
This is a new information collection.
16. Plans for Tabulation and Publication and Project Time Schedule
The results from the information collection will not be published.
17. Display of OMB Expiration Date
The expiration date and OMB control number are displayed on the first page of each (top right corner)
instrument.

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