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Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules
benefit from a policy finalized at 155.420c5 in the 2022 Payment Notice that requires the Exchange to provide 60 days from the date that the consumer knew or reasonably should have known of the occurrence of the triggering event.165 Exchanges could leverage this provision to help enable consumers to maintain coverage after losing Medicaid. We solicit comment regarding additional strategies to help consumers maintain coverage.
We considered taking no action related to our proposal to clarify, for purposes of the special enrollment period rules at 155.420, that a qualified individual, enrollee, or his or her dependent who qualifies for APTC
because they meet the criteria at 155.305f, but who qualifies for a maximum APTC amount of zero dollars, is not considered APTC eligible.
However, we believe that consumers and other stakeholders will benefit from clarity on this issue because it improves transparency of Exchanges implementation of the special enrollment period qualifying events provided at 155.420d6. Increased transparency will allow consumers to better understand the eligibility criteria for special enrollment periods provided by 155.420d6 and may help Exchanges and other stakeholders to more effectively message rules that determine eligibility. We also considered applying this clarification only to some of the special enrollment period qualifying events at 155.420d6, such as only to those at paragraphs d6iiii, to permit some individuals to access a special enrollment period based on newly becoming eligible for a maximum APTC
amount of zero dollars after previously having been APTC ineligible for another reason. We believe that applying this definition to all of the qualifying events in 155.420d is simpler and makes sense based on the nature of the qualifying events. However, we have solicited comment on whether Exchanges and other stakeholders agree with this approach, or believe that another definition of APTC eligibility should apply to certain qualifying events at 155.420d6.
We considered restoring user fee rates to their 2021 levels at 3 percent and 2.5
percent of total monthly premium for issuers in the FFE and SBEFPs, respectively. However, based on our analysis of estimated 2022 enrollment, premiums, and contract costs, we determined that this increase would be unnecessary to finance the Exchange essential functions.
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Regarding the section 1332 waiver proposals in this rule, the Departments considered rescinding the 2018
Guidance and the regulatory updates and policies finalized in part 1 of the 2022 Payment Notice final rule such that the Departments would rely on the statute for review and approval of section 1332 waiver applications. The Departments did not choose this option because not proposing policies, interpretations and standards to help explain the program requirements would lead to uncertainty for states considering section 1332 waiver applications. The Departments also considered codifying the policies and interpretations in the 2015 Guidance in regulation, but determined proposing new policies and interpretations some of which align with previous guidance and rulemaking was the clearest way to explain the proposed requirements for submission and approval of section 1332 waivers.
E. Regulatory Flexibility Act RFA
The Regulatory Flexibility Act 5
U.S.C. 601, et seq., requires agencies to prepare an initial regulatory flexibility analysis to describe the impact of the proposed rule on small entities, unless the head of the agency can certify that the rule will not have a significant economic impact on a substantial number of small entities. The RFA
generally defines a small entity as 1
a proprietary firm meeting the size standards of the Small Business Administration SBA, 2 a not-forprofit organization that is not dominant in its field, or 3 a small government jurisdiction with a population of less than 50,000. States and individuals are not included in the definition of small entity. HHS considers a rule to have a significant economic impact on a substantial number of small entities if at least 5 percent of small entities experience a change in revenues of more than 3 to 5 percent.
In this proposed rule, we propose revised 2022 user fee rates, which will impact issuer rate setting. We believe that health insurance issuers and group health plans would be classified under the North American Industry Classification System code 524114
Direct Health and Medical Insurance Carriers. According to SBA size standards, entities with average annual receipts of $41.5 million or less would be considered small entities for these North American Industry Classification System codes. Issuers could possibly be classified in 621491 HMO Medical Centers and, if this is the case, the SBA
size standard would be $35 million or
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less.166 We believe that few, if any, insurance companies underwriting comprehensive health insurance policies in contrast, for example, to travel insurance policies or dental discount policies fall below these size thresholds. Based on data from MLR
annual report 167 submissions for the 2019 MLR reporting year, approximately 77 out of 479 issuers of health insurance coverage nationwide had total premium revenue of $41.5 million or less. This estimate may overstate the actual number of small health insurance companies that may be affected, since over 67 percent of these small companies belong to larger holding groups, and many, if not all, of these small companies are likely to have nonhealth lines of business that will result in their revenues exceeding $41.5
million. The user fee rates proposed in this rule are lower than the 2021 benefit year user fee rates by 0.25 percent, and these new proposed rates are higher than the previously finalized 2022
benefit year user fee rates by 0.5
percent. Therefore, these user fee rates would only impact premium revenue for these issuers by approximately 0.25
percent, since no issuer has effectuated payments under the previously finalized user fee rates, and this impact is below HHSs 3 to 5 percent significance threshold stated above.
In this proposed rule, we also propose to codify a new monthly special enrollment period for certain APTCeligible individuals. Because this special enrollment period has the potential to introduce new adverse selection risk into the individual market, we seek comment in the RIA on the impact on premiums of this policy in Exchanges where it is implemented.
We estimate that this policy could result in an increase in premiums of 0.5 to 2
percent when the enhanced APTC
provisions of the ARP are in effect, and this impact is below HHSs 3 to 5
percent significance threshold stated earlier in this preamble.
In addition, the other proposals in this rule would either reduce costs or have no cost impact. Therefore, we do not expect the proposed provisions of this rule to affect a substantial number of small entities. We do not believe that this threshold will be reached by the requirements in this proposed rule or final rule. Therefore, the Secretary has determined that this proposed rule will not have a significant economic impact 166 https www.sba.gov/document/support-tablesize-standards.
166 Available at https www.cms.gov/CCIIO/
Resources/Data-Resources/mlr.html.

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