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Federal Register / Vol. 86, No. 127 / Wednesday, July 7, 2021 / Rules and Regulations
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C. Sources and State Data Considerations To the extent possible, unless otherwise provided, we will continue to use data submitted to the federal government by QHP issuers seeking to offer coverage through the Exchange in the relevant BHP state to perform the calculations that determine federal BHP
payment cell rates.
States operating an SBE in the individual market, however, must provide certain data, including premiums for second lowest cost silver plans, by geographic area, for CMS to calculate the federal BHP payment rates in those states. States operating BHPs interested in obtaining the applicable 2022 program year federal BHP payment rates for its state must submit such data accurately, completely, and as specified by CMS, by no later than October 15, 2021. If additional state data that is, in addition to the second lowest cost silver plan premium data are needed to determine the federal BHP payment rate, such data must be submitted in a timely manner, and in a format specified by us to support the development and timely release of annual BHP Payment Methodologies.
The specifications for data collection to support the development of BHP
payment rates are published in CMS
guidance and are available in the Federal Policy Guidance section at https www.medicaid.gov/federalpolicy-Guidance/index.html under State Report for Health Insurance Exchange Premiums.
States operating a BHP must submit enrollment data to us on a quarterly basis and should be technologically prepared to begin submitting data at the start of their BHP, starting with the beginning of the first program year. This differs from the enrollment estimates used to calculate the initial BHP
payment, which states would generally submit to CMS 60 days before the start of the first quarter of the program start date. This requirement is necessary for us to implement the payment methodology that is tied to a quarterly reconciliation based on actual enrollment data.
We will continue the policy first adopted in the 2016 final BHP Payment Methodology that in states that have BHP enrollees who do not file federal tax returns non-filers, the state must develop a methodology to determine the enrollees household income and household size consistently with Marketplace requirements.9 The state must submit this methodology to us at 9 See
81 FR at 10097.

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the time of their Blueprint submission.
We reserve the right to approve or disapprove the states methodology to determine household income and household size for non-filers if the household composition and/or household income resulting from application of the methodology are different from what typically would be expected to result if the individual or head of household in the family were to file a tax return. States currently operating a BHP that wish to change the methodology for non-filers must submit a revised Blueprint outlining the revisions to its methodology, consistent with 600.125.
In addition, as the federal payments are determined quarterly and the enrollment data is required to be submitted by the states to us quarterly, the quarterly payment will be based on the characteristics of the enrollee at the beginning of the quarter or their first month of enrollment in the BHP in each quarter. Thus, if an enrollee were to experience a change in county of residence, household income, household size, or other factors related to the BHP payment determination during the quarter, the payment for the quarter will be based on the data as of the beginning of the quarter or their first month of enrollment in the BHP in the applicable quarter. Payments will still be made only for months that the person is enrolled in and eligible for the BHP. We do not anticipate that this will have a significant effect on the federal BHP payment. The states must maintain data that is consistent with CMS
verification requirements, including auditable records for each individual enrolled, indicating an eligibility determination and a determination of income and other criteria relevant to the payment methodology as of the beginning of each quarter.
Consistent with 600.610 Secretarial determination of BHP payment amount, the state is required to submit certain data in accordance with this notice. We require that this data be collected and validated by states operating a BHP, and that this data be submitted to CMS.
D. Discussion of Specific Variables Used in Payment Equations 1. Reference Premium RP
To calculate the estimated PTC that would be paid if BHP-eligible individuals enrolled in QHPs through an Exchange, we must calculate a RP
because the PTC is based, in part, on the premiums for the applicable second lowest cost silver plan as explained in section III.D.5. of this final methodology, regarding the premium
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tax credit formula PTCF. This method is unchanged from the current methodology except to update the reference years, and to provide additional methodological details to simplify calculations and to deal with potential ambiguities. Accordingly, for the purposes of calculating the BHP
payment rates, the RP, in accordance with 26 U.S.C. 36Bb3C, is defined as the adjusted monthly premium for an applicable second lowest cost silver plan. The applicable second lowest cost silver plan is defined in 26 U.S.C.
36Bb3B as the second lowest cost silver plan of the individual market in the rating area in which the taxpayer resides that is offered through the same Exchange. We will use the adjusted monthly premium for an applicable second lowest cost silver plan in the applicable program year 2022 as the RP except in the case of a state that elects to use the prior plan years premium as the basis for the federal BHP payment for 2022, as described in section III.E. of this final methodology.
The RP will be the premium applicable to non-tobacco users. This is consistent with the provision in 26
U.S.C. 36Bb3C that bases the PTC
on premiums that are adjusted for age alone, without regard to tobacco use, even for states that allow insurers to vary premiums based on tobacco use in accordance with 42 U.S.C.
300gga1Aiv.
Consistent with the policy set forth in 26 CFR 1.36B3f6, to calculate the PTC for those enrolled in a QHP through an Exchange, we will not update the payment methodology, and subsequently the federal BHP payment rates, in the event that the second lowest cost silver plan used as the RP, or the lowest cost silver plan, changes that is, terminates or closes enrollment during the year.
The applicable second lowest cost silver plan premium will be included in the BHP payment methodology by age range if applicable, geographic area, and self-only or applicable category of family coverage obtained through the BHP.
We note that the choice of the second lowest cost silver plan for calculating BHP payments relies on several simplifying assumptions in its selection.
For the purposes of determining the second lowest cost silver plan for calculating PTC for a person enrolled in a QHP through an Exchange, the applicable plan may differ for various reasons. For example, a different second lowest cost silver plan may apply to a family consisting of two adults, their child, and their niece than to a family with two adults and their children,
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