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Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules special enrollment period to change to a plan category other than silver.
Additionally, we believe that that access to premium-free or very low-cost 94 percent AV coverage will help to mitigate risk of adverse selection, because qualifying individuals will not have an incentive to end coverage when health care services are no longer needed. However, we seek comment on the degree to which the risk of adverse selection increases due to the fact that not all qualifying individuals who have a household income no greater than 150
percent of the FPL will have access to a silver plan with a zero-dollar premium and therefore, due to their small premium for a silver plan, might be more inclined to enroll in coverage due to a health care need and end coverage once this need has been met.
We estimate that this adverse selection risk may result in issuers increasing premiums by approximately 0.5 to 2 percent, and a corresponding increase in APTC outlays and decrease in income tax revenues of approximately $250 million to $1
billion, when the enhanced APTC
provisions of the ARP are in effect. We describe this impact in more detail and seek comment on it in the regulatory impact analysis RIA section later in this proposed rule. We also discuss some of the reasons adverse selection cannot be mitigated in the following paragraphs.
The adverse selection risk presented by the proposal stems, in part, from qualifying individuals who live in states where premiums for Exchange coverage cannot be fully paid for with APTC,60
such that these individuals will not have access to a silver plan with a zerodollar premium. Such individuals include residents of states that require all QHPs in the state to cover services that do not qualify as EHB, or that require coverage of certain abortion services for which federal funding is prohibited, and we estimate that ten states may fall into these categories. The portion of premium attributable to services ineligible for APTC is generally small, but increases with age and family size. Additionally, in a few locations, QHP issuers plan designs are such that both the lowest-cost silver plan and the second lowest-cost silver plan 61 cover services that do not qualify as EHBs, which makes it impossible for most individuals, including those whose household income does not exceed 150
60 See section 1303b2A of the ACA and section 36Bb3D of the Code.
61 The second lowest-cost silver plan is the benchmark plan used to determine a households APTC eligibility. See 26 CFR 1.36B3d1 and f.

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percent of the FPL, to access a silver plan with a zero dollar monthly premium.
Other household-level variation in access to a silver plan with a zero-dollar premium includes households where some, but not all, applicants are APTCeligible for example, a household with one or more members with an offer of other MEC through a job, and households with applicants living in different locations, because Exchanges must determine APTC based on a benchmark plan specific to each location.62 In this case, the applicable premium amount will be based on the subscribers location, and so available APTC may not fully cover a silver plan premium for the policy. Finally, households that include one or more members who attest affirmatively to their smoking status also may not qualify for an APTC amount sufficient to pay the full premium of a silver plan, because consistent with 26 CFR 1.36B
3e, APTC eligibility is not determined using a benchmark plan that rates for tobacco.63
We seek comment from health insurance issuers and other stakeholders on our position that adverse selection related to this special enrollment period will be mitigated by the availability of free or very low-cost coverage with a 94
percent AV and the application of plan category limitations to this new special enrollment period, or whether the adverse selection risk created by this new special enrollment period cannot be sufficiently mitigated such that its creation may result in significant rate increases. We also solicit comment regarding whether health insurance issuers and other stakeholders have concerns that the policy could cause any adverse selection among higher income individuals with variable hours and income. We also seek comment on whether the requirement that Exchanges verify applicants projected annual household income post-enrollment, consistent with 45 CFR 155.320c, is sufficient, or if there are other measures we should put in place to further protect program integrity. We also solicit comment on estimated implementation burdens for Exchanges who elect to provide this additional enrollment opportunity, including whether implementation of this special enrollment period will be possible in time for consumers to benefit from it during the 2022 plan year. We request 62 26

CFR 1.36B3f4.
of May 2021, CMS data indicate that 18
percent of current enrollees, depending on the state, in Exchanges on the Federal platform are rated for tobacco use.
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comment on whether issuers will have sufficient time to adjust rate filings to account for any increased risk and whether state regulators will have sufficient time to review those filings after a final rule is issued.
We further request comment on whether this proposed special enrollment period should be available indefinitely as proposed, or whether it should be time-limited. For example, we seek comment on whether we should finalize the proposed special enrollment period to be available only for coverage during years when enhanced APTC
benefits are also available, as provided by the section 9661 of the ARP or any subsequent statute. Finally, we request comment on strategies for providing outreach and education for consumers who may be eligible for this special enrollment period, in particular to help qualifying individuals understand and take advantage of the free or very lowcost coverage that is available to them.
Within this group, we request comments on strategies for educating consumers who qualify to enroll in a 94 percent AV
silver plan about the benefits of enrolling in such a plan even if they are required to pay a small premium, as opposed to electing a premium-free bronze plan with a lower AV.
6. Clarification of Special Enrollment Period for Enrollees Who Are Newly Eligible or Newly Ineligible for Advance Payments of the Premium Tax Credit 155.420f We are proposing new language to clarify that, for purposes of the special enrollment period rules at 155.420d, references to ineligibility for APTC refer to being ineligible for such payments or being technically eligible for such payments but qualifying for a maximum of zero dollars per month of such payments. That is, a qualified individual, enrollee, or his or her dependent who is technically eligible for APTC because they meet the criteria at 155.305f, but who qualifies for a maximum APTC amount of zero dollars, is also considered ineligible for APTC
for purposes of these special enrollment periods, even if they experience a change in circumstance from an APTC
ineligible status in accordance with 155.305f, such as having other MEC.
Currently, the special enrollment periods to which this clarification is applicable are the triggering events at 155.420d6, but we propose that the clarification apply to all of 155.420 to ensure consistency, for example, between special enrollment period triggering events at 155.420d and related coverage effective date and
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