On December 12, 2013, with twelve shopping days until Christmas and three shopping days left until exchange enrollment was supposed to close for 2013, HHS, citing “unforeseen barriers to enrollment in the Exchanges,” issued an interim-final rule entitled “Maximizing January 1, 2014 Coverage Opportunities.”  The rule formally extends until December 23, 2013, the date by which individuals must enroll in the exchanges to ensure coverage for January 1, 2014, giving applicants eight additional shopping days.  The rule also extends until December 31 the date by which enrollees must pay their premium to ensure coverage for January 1, while the preface encourages insurers to give enrollees even more time to pay, or to accept partial payments. The preface to the rule encourages insurers to help ensure continuity of provider coverage and availability of off-formulary drugs.

Finally, another notice, also released on December 12, extends coverage in the Pre-existing Condition Insurance Program (PCIP), which was supposed to expire on December 31, 2013, for one month.

The troubles that have afflicted the Healthcare.gov federal exchange website and many state exchanges are common knowledge.  Although enrollment is going more smoothly now, millions of uninsured individuals who are eligible for advance premium tax credits that will largely cover the cost of their coverage have not yet been able to enroll.  Millions of additional individuals have been unable to renew their current policies in the individual and small group market, as those policies do not meet 2014 market reform requirements.  Although these individuals can purchase policies in the individual and small group market outside of the exchange, and most of them probably will, many would be able to find better deals in the exchange or qualify for premium tax credits but have not yet been able to do so.

In addition, 86,000 individuals are covered through the PCIP and a couple of hundred thousand more through state high risk pools, which were supposed to have closed at the end of 2013.  These individuals desperately need coverage.  The interim final rule attempts to extend the opportunities all of these individuals have to gain coverage.

What’s In The Rule?

Extending the enrollment deadline.  First, the rule formally extends the deadline for applying for coverage effective for 2014 through the exchanges until December 23, 2013.  This extension had been announced earlier but now is set in a formal rule.  The preface also notes that HHS may consider delaying this date further under “exceptional circumstances” but that it does not expect to do so.

The preface also notes that existing rules provide for a special enrollment period where an exchange makes an error.  The ramifications of this are not wholly clear, since the open enrollment period lasts until March 31, 2014, but HHS seems to be saying that an applicant who had enrolled prior to December 23, and whose enrollment was not forwarded to a qualified health plan until after December 31 would still be able to enroll for January.

The December 23 date applies in the federal individual and SHOP exchanges, but not in the market outside the exchanges, where insurers are not required to accept enrollments after December 15 for January 1, 2014 coverage. State individual exchanges must allow enrollment until December 23 for January 1, 2014 coverage, but may permit enrollment for January 1 even later if they choose to do so.  State SHOP exchanges can also require enrollment to close by December 15, 2013, for January 1, 2014 coverage.

Insurers can continue to accept exchange applications for January 1, 2014 coverage as late as January 31, 2014 at their discretion.  The rule does not discuss how advance premium tax credit payments will be provided for insurers that accept late enrollments.   Insurers that prefer to align their plan selection dates in both the inside and outside markets can also accept applications after December 15 in the outside market.  These delays only apply for December, 2013 and January, 2014.  In subsequent months, applicants must enroll by the 15th of the month to ensure coverage for the 1st of the following month, although insurers have the discretion to offer earlier coverage dates.

Extending the deadline for paying premiums.  Under the new rule, insurers in the federal exchange must accept premium payments up until the last day of the month before coverage begins during the initial open enrollment period.  For example, an enrollee will have until December 31, 2013 to pay for coverage to begin on January 1, 2014.  This payment policy only applies for the initial open enrollment period and does not apply to the state exchanges, which can set their own payment policies.  Insurers may accept payment after January 1, 2014 for coverage retroactive to January 1.

Insurers were supposed to have sent enrollment confirmation transactions to HHS by January 5 for January, but are now allowed to send confirmations at any time in January if they accept late payment.  Insurers can also establish a threshold payment amount and accept an initial partial payment above this threshold.  Insurers must, however, apply payment dates and other enrollment procedures in a consistent, non-discriminatory manner.  Enrollees must make at least one full premium payment to qualify for a grace period if they miss later payments.

Encouraging transitional provider and drug access.  The preface “strongly encourages,” (although the rule does not require) insurers to ease the January 1, 2014 transition in two other areas: access to providers and access to prescription drug coverage.  First, HHS expresses a concern that enrollees may enroll in a plan relying on that plan’s coverage directory only to find out that their provider is not covered.  HHS urges insurers to keep their provider directories current, but also urges insurers to consider providers to be in-network for coverage and cost-sharing purposes if the provider was listed in the provider directory, whether or not the provider is in fact in-network.

HHS also urges insurers to adopt policies for January, 2014 that avoid disruption of care, such as considering a provider in-network if the provider was treating an acute episode of care at the start of the year. Many states impose similar continuity of care requirements on insurers.  Although HHS does not impose these requirements by rule, it does note that it might consider failure of health plans to keep up their provider directories or provide continuity of care in determining whether making the insurer available through the exchange is “in the interest of individuals and qualified employers” in the annual qualified health plan renewal process in the future.

Second, HHS encourages health plans to cover non-formulary drugs (including drugs for which coverage might otherwise require prior-authorization or step therapy) for the first 30 days of coverage after January 1, 2014 for individuals who have been prescribed and who are already taking those drugs.  This would give these individuals and their physicians time to become familiar with the plan’s formulary and the exceptions process through which non-formulary drugs can be accessed (set out in Appendix C of the “letter to issuers” from April of 2013).

Finally, HHS published a “know your rights” fact sheet for consumers, informing consumers how to apply for a formulary exception or file an appeal.

The emergency rule will surely not be welcome to insurers, already under a great deal of stress because of the widely publicized back-end problems with the exchange and lower-than expected enrollments.  They promise massive headaches for insurers, providers, and consumers as consumers attempt to access care in January and providers try to figure out whether patients are covered or not, and by whom.  They pose some threat of adverse selection as consumers may delay paying their premiums until they are certain they need coverage, but given the short time period for payment and the high deductibles that most consumers will face, this should be a minor consideration.  In any event, HHS has concluded that the urgent, immediate, need for coverage facing many Americans was worth further inconveniencing the insurers that participate in the exchange.

Extending Federal High-Risk Pool Coverage

HHS also took another step to protect consumers on December 12, 2013, by extending coverage in the federally run Pre-Existing Condition Insurance Plan (PCIP) for one month, from January 1, 2014 through January 31, 2014, for enrollees who had not yet been able to obtain coverage through the exchanges.  The PCIP was funded for the period from 2010 to 2013, with coverage ending when the reformed health insurance marketplace and premium tax credits became available on January 1, 2014.  There have been widespread reports, however, that many of the 86,000 enrollees in the PCIP have so far been unable to enroll in coverage because of difficulties in using the exchanges.

PCIP enrollees will be notified by mail of this offer to extend their coverage and with details about cost sharing.  Enrollees can extend coverage by sending in their January premium payment, at the same monthly rate that they paid for December, 2013.  A number of state high risk pools have also extended coverage into 2014 to ease the transition to 2014 coverage.