Final 2024 Payment Rule, Part 1: Insurance Market Rules And Consumer Assistance

On April 17, 2023, U.S. Department of Health & Human Services (HHS) released its final rule to update requirements and standards for health insurers and Marketplaces under the Affordable Care Act (ACA) for plan year (PY) 2024. In addition to this annual “Notice of Benefit & Payment Parameters,” (NBPP) the agency released a Fact Sheet about the final rule, and the final PY 2024 Actuarial Value (AV) Calculator and Methodology.

HHS received over 300 public comments on its draft NBPP, and in this final rule advances proposals to prohibit Marketplace plans without a provider network, limit the profusion of non-standardized plans, encourage enrollment in plans with reduced cost-sharing for lower-income consumers, reduce deceptive marketing practices, and lower administrative barriers to enrollment. It also finalizes modifications to risk adjustment, Advance Premium Tax Credit (APTC) policy, marketplace transitions, user fees, and other marketplace standards. Key themes underlying many of the 2024 rules are the administration’s commitment to advancing health equity, improving the consumer experience, and expanding Marketplace enrollment.

In this first of three Forefront articles on the final 2024 NBPP, we focus on market reforms and consumer assistance. The second and third articles focus on risk adjustment, proposed changes to marketplace operational standards, and APTC policies.

Network Adequacy And Essential Community Providers

The 2024 NBPP maintains the network adequacy standards for Marketplace health plans, implemented by the Biden administration in plan year 2023, with modest changes. The administration is also ratcheting up its expectations that Marketplace issuers include essential community providers (ECPs) in their plan networks.

Plans That Do Not Use A Provider Network

The ACA requires that Marketplace plans ensure a “sufficient choice” of providers and provide information to enrollees about the availability of in-network and out-of-network providers. The statute also requires that plans “include within health insurance plan networks those essential community providers, where available, that serve predominantly low-income, medically-underserved individuals.” In the proposed 2024 NBPP, HHS argued that issuers cannot comply with the ACA standards, and the agency cannot effectively enforce compliance, if a plan does not use a provider network. The agency has observed that plans without provider networks can result in access and affordability challenges for enrollees, including substantial and unexpected out-of-pocket costs. Under the ACA, the Marketplace has broad discretion to certify a plan for participation only if determines that doing so is “in the interests” of consumers.

The agency therefore proposed to repeal a 2016 policy that exempted Marketplace plans, stand-alone dental (SADP), and small business health option program (SHOP) plans that do not maintain a provider network from the ACA’s network adequacy requirements.

Since 2016, only a single health plan issuer on the federally facilitated Marketplace (FFM) has sought certification without a provider network. For SADPs, only 8 of the 672 participating in the Marketplace in 2022 did not use a network of providers, a number that has declined each year since 2017. In this current plan year, SADPs without a provider network are concentrated in just two frontier states, Alaska and Montana.

HHS is finalizing its requirement that Marketplace health plan, SADP, and SHOP issuers maintain a provider network beginning in PY 2024. Most commenters supported the proposal.

However, HHS estimates that approximately 2,200 SADP enrollees could be required to switch plans under this policy. To try to mitigate this risk, HHS is creating a “limited exception” for SADP issuers in areas where it is considered “prohibitively difficult” to establish a network of dental providers. This determination must be made based on attestations from state insurance regulators in states where at least 80 percent of their counties are classified as Counties with Extreme Access Considerations that at least one of these factors exists:

A significant shortage of dental providers;

A significant number of dental providers unwilling to contract with Marketplace SADPs; or

Significant geographic limitations impacting consumer access to dental providers.

Appointment Wait Time Standards

Beginning this year, issuers offering plans on the FFM and the state-based Marketplaces using the federal platform (SBM-FP) must ensure that enrollees can obtain provider services within a maximum time or distance from their homes. In its 2023 NBPP, HHS also required QHP issuers to meet maximum appointment wait time standards but delayed implementation of that requirement to plan year 2024, citing concerns about the compliance burden on issuers.

In this final rule, HHS will again delay the imposition of appointment wait time standards, this time to PY 2025. A majority of public comments urged the agency not to implement this requirement for PY 2024, arguing that issuers need additional guidance and specificity about how HHS would assess wait times and enforce compliance. Commenters raised several barriers to implementation, including:

The burden on providers to report data to issuers;

Issuers’ operational challenges monitoring contracted providers;

Difficulties receiving accurate wait time data from providers;

Fluctuations in appointment wait times over the course of the year; and

Workforce staffing, recruiting, and retention challenges.

In agreeing to delay the implementation timeline for appointment wait time standards, HHS notes they are pursuing wait time standards in other government coverage programs. The extension will enable them to better assure alignment across programs.

Essential Community Providers

HHS is finalizing new requirements to expand the representation of ECPs in Marketplace plan networks. First, the agency will add two new stand-alone ECP categories to the current list of six categories of ECPs:

Federally Qualified Health Centers (FQHC)

Ryan White Program Providers

Family Planning Providers

Indian Health Care Providers

Inpatient Hospitals

Other ECP Providers (defined to include Substance Use Disorder Treatment Centers, Community Mental Health Centers, Rural Health Clinics, Black Lung Clinics, Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics, and Tuberculosis Clinics).

The two new categories for 2024 will be: Mental Health Facilities and Substance Use Disorder (SUD) Treatment Centers, thus removing them from the “Other ECP Providers” category. This change means that issuers must attempt to contract with at least one SUD Treatment Center and at least one Mental Health Facility in their service areas. HHS is also adding Rural Emergency Hospitals as a provider type under the “Other ECP Providers” category.

Second, HHS will require Marketplace plans to contract with at least 35 percent of available FQHCs and at least 35 percent of available Family Planning Providers that qualify as ECPs. This is in addition to the existing requirement that plans meet the overall 35 percent threshold requirement for ECP participation in each service area. HHS is establishing specific thresholds for FQHCs and Family Planning Providers because they are the two largest ECP categories; together they represent the majority of the ECPs on the list maintained by HHS. The agency argues that applying the 35 percent threshold to these two provider types could help increase access in low-income areas to the broad range of services these providers offer.

HHS estimates that the majority of Marketplace issuers already meet or exceed the 35 percent threshold for these providers. Specifically, if these thresholds were in place today, 76 percent of issuers in the FFM would be able to meet the 35 percent threshold for FQHCs, and 61 percent would be able to meet the threshold for Family Planning Providers. Issuers who cannot meet the standard may submit written justifications. Most public comments supported HHS’ proposals to increase ECP representation in Marketplace plan networks, noting that they should help expand access to mental health and SUD treatment services.

Standardized Plan Options

The Biden administration re-introduced standardized plan options for the FFM and SBM-FPs for plan year 2023. The administration believes that standardized plans are important to help streamline and simplify the plan selection process for Marketplace consumers. These plans are also designed to include pre-deductible coverage for several high-value health care services, which HHS argues will reduce barriers to access, combat discriminatory benefit designs, and improve health equity. The standardized plans also emphasize the use of copayments instead of coinsurance, the latter a form of cost-sharing that can result in unexpected financial liability for consumers. For plan year 2024, HHS proposed (and is now finalizing) a relatively modest change to its standardized plans.

Specifically, HHS will no longer require FFM and SBM-FP issuers to offer a standardized plan at the “non-expanded” bronze metal level, (“Expanded” bronze plans cover at least one non-preventive service pre-deductible or meet the IRS’ definition of a high-deductible health plan and are permitted to have an actuarial value of up to 5 points above the 60 percent standard; “non-expanded” bronze plans do not.) HHS has found that the low actuarial value of the non-expanded bronze plans preclude the ability to include any pre-deductible coverage. They also note that few insurers have chosen to offer non-expanded bronze plans, making the decision to no longer require a standardized version less disruptive.

Issuers must continue to offer standardized plans in every service area where they also offer non-standardized plan options at the following metal levels:

One expanded bronze plan;

One standard silver plan;

One version each of the three income-based silver cost-sharing reduction (CSR) plan variations;

One gold plan; and

One platinum plan

As they did for plan year 2023, HHS has declined to extend this requirement to issuers in the SBMs and in Oregon, which has its own standardized plan requirements; they have also created a set of standardized plan options that will apply only in Delaware and Louisiana, due to those two states’ cost-sharing standards.

Public comments were mixed on HHS’ decision to no longer require Marketplace issuers to offer a standardized plan at the non-expanded Bronze level. Some supported the move, noting the reduced burden on issuers and the greater popularity of the expanded bronze plans. Others expressed concerns that consumers currently enrolled in these plans would have to switch to a new plan.

HHS will continue to require issuers of standardized plans to use only four tiers of prescription drug cost-sharing in their formularies: (1) generic, (2) preferred brand name, (3) non-preferred brand name, and (4) specialty. Although the agency recognizes that 5-6 tiers of drug cost-sharing are common in the commercial market, they argue that four tiers will allow for more “predictable and understandable” drug coverage, reducing the risk of unexpected financial liability for enrollees.

In spite of HHS’ concerns that Marketplace issuers are not including certain drugs at appropriate cost-sharing tiers (such as placing generic drugs in the preferred or non-preferred brand drug tiers), the agency decided not to finalize a proposal that all standardized plans place generic drugs in the generic drug tier and all covered brand name drugs either in the preferred or non-preferred brand name tiers. Commenters expressed concerns, and HHS agrees, that such a requirement could inhibit competition among manufacturers for favorable placement on plan formularies, which can help reduce costs and increase medication adherence for consumers.

The agency will continue to differentially display standardized plan options, which they call “Easy Pricing” plans, on HealthCare.gov. Consumers can apply filters to the search engine on the site, and compare only standardized plans. HHS also requires web-brokers and Marketplace issuers using the direct enrollment pathway to differentially display the standardized plan options, unless HHS approves a deviation.

Limits On Non-Standardized Health Plans

A RAND Corporation review of over 100 research studies found that having too many health plan choices can lead to poor enrollment decisions due to consumers’ difficulty processing complex health insurance information. Yet this year, the average number of plans available to Marketplace consumers is 113.7.

HHS will therefore adopt a limit on the number of non-standardized plans that issuers in the FFM and SBM-FPs may offer. The proposed rule would have permitted issuers to offer only two non-standardized plans per product network type and metal level (not including catastrophic plans) in any service area in PY 2024. In response to public comments arguing for a more gradual approach, the final rule places the limit at four non-standardized plans for plan year 2024, dropping to two non-standardized plans beginning in PY 2025.

HHS will also give issuers that offer plans with additional dental and/or vision benefits greater flexibility, significantly increasing the number of non-standardized plans they can offer at each metal level. For example, in 2024, within a single service area, issuers may offer:

Four non-standardized gold HMOs with no additional dental or vision coverage;

Four non-standardized gold HMOs with additional dental coverage;

Four non-standardized gold HMOs with additional vision coverage;

Four non-standardized gold HMOs with additional dental and vision coverage;

Four non-standardized gold PPOs with no additional dental or vision coverage;

Four non-standardized gold PPOs with additional dental coverage;

Four non-standardized gold PPOs with additional vision coverage; and

Four non-standardized gold PPOs with additional dental and vision coverage.

This flexibility allows issuers to offer up to 32 non-standardized plans per metal level in each service area in PY 2024, plus the required standardized plans. Beginning in PY 2025, that number will be reduced to a maximum of 16 non-standardized plans per metal level, per service area, although HHS intends to propose creating an exceptions process to allow issuers to expand beyond the two-plan limit. Thus, in service areas with more than one issuer, consumers will likely continue to face a large number of plan options.

Still, HHS estimates that these limits will reduce the average total number of plans available to each consumer from 113.7 to 90.5 in PY 2024. Once the cap drops to two non-standardized plans in PY 2025, the average total number of plans will be 65.3 for each consumer. HHS views the standardized benefit designs and the plan limits as parts of a multi-pronged strategy to “meaningfully simplify” consumers’ plan selection process, reducing suboptimal plan selection and unexpected financial liability for enrollees.

HHS is not extending the non-standardized plan limits to issuers in SBMs because many SBMs already limit the number of plan options. HHS also believes that SBMs are best positioned to understand what consumers in their markets need.

Many commenters support limiting the number of plans, arguing that the number of plan options on the Marketplace has increased “beyond a point that is productive.” Commenters observed that consumers do not have the time, resources, or health literacy to understand and compare the overwhelming number of plan options.

Other commenters argue that HHS should invest in improvements to the HealthCare.gov user interface and choice architecture, rather than limiting the number of plan options or standardizing benefits. HHS agrees that improving HealthCare.gov is important but finds such efforts to be insufficient, by themselves, to meaningfully reduce the risk of plan choice overload. HHS also believes that reducing the number of plans available will help advance health equity, noting that the excessive number of plans, particularly at the silver level, places the greatest burdens on low-income individuals who qualify for CSRs.

Commenters who opposed limiting the number of plans also argued that doing so would pose a significant burden on issuers who have already invested in developing products for PY 2024, and that it would cause disruption for consumers who would have to be re-enrolled in plans they didn’t actively choose. HHS estimates that of the 101,453 non-standardized plan options currently available, approximately 17,532 will need to be discontinued, with a projected 2.72 million enrollees required to change plans for 2024. However, the agency has also found that, on average, 71 percent of each issuer’s enrollment is concentrated among just two plans per product network type and metal level. The remaining portion of each issuer’s enrollment is more evenly distributed across less popular offerings. Many plans have very small enrollment numbers. HHS argues that the plan limits will simply concentrate enrollment among the most popular current product offerings. They also believe that phasing in the reductions in plan offerings over two years, instead of the one year originally proposed, will reduce the burdens for issuers and disruption for consumers.

Other commenters observed that plan limits might “severely restrict” consumer choice in markets that have less competition among issuers and fewer plan offerings. However, HHS argues that the cap on plan offerings strikes an “appropriate balance” by reducing the risk of plan choice overload while preserving a degree of consumer choice, even for consumers in counties with low issuer participation.

As an alternative to limiting the number of plans, HHS had proposed re-instating an Obama-era “meaningful difference” standard. If this approach had been adopted, HHS would have grouped plans by issuer ID, county, metal level, product network type, and deductible integration type, and then evaluated whether plans within each group were meaningfully different based on differences in deductible amounts. Deductibles would have had to differ by more than $1,000 to satisfy the new standard. Because HHS is finalizing the policy to limit the number of non-standardized plan options, they are not finalizing the proposal to impose a meaningful difference standard.

Standards For Navigators And Other Consumer Assisters

This rule repeals the current prohibitions on Marketplace Navigators, certified application counselors, and non-Navigator assistance personnel (collectively, Assisters), from going door-to-door or directly contacting consumers to provide enrollment assistance. HHS argues that allowing such direct contact will remove barriers to timely and relevant enrollment assistance, and will allow Assisters to reach more potentially eligible consumers, including those who have difficulty traveling due to lack of mobility or transportation, or who are immunocompromised.

Public comments on the draft rule overwhelmingly supported this proposal, noting that it will help reduce uninsured rates and health disparities as well as the burden on consumers. Many observed that lifting the ban on door-to-door outreach and direct contacts will be particularly important to help maintain coverage for people affected by the Medicaid unwinding. Some commenters supported the proposal but urged HHS to take steps to mitigate fraud. HHS responds by detailing their efforts to reduce fraud, including updating privacy and security requirements for all Assister organizations.

Rules For Brokers And Agents

Roughly half of all federal Marketplace enrollments are facilitated by health insurance agents and brokers, according to a 2020 CMS report. One in five brokers assist more than 200 consumers during the Marketplace’s annual open enrollment period. Since the inception of the Marketplaces, HHS has had standards of conduct for agents and brokers who wish to sell Marketplace plans.

Extension Of Review Times

Where there is evidence of fraud or abusive conduct, HHS has the power to immediately suspend or terminate a broker, agent, or web-broker’s Marketplace agreement. The broker, agent, or web-broker may then submit rebuttal evidence protesting the suspension or termination. The 2024 NBPP finalizes a proposal to give HHS an additional 15 calendar days to review rebuttal evidence from agents, brokers, or web-brokers in the case of a Marketplace suspension, and an additional 30 calendar days in the case of a Marketplace termination. HHS will thus have a total of up to 45 or 60 calendar days to review rebuttal evidence.

The agency has found that the process for reviewing rebuttal evidence from agents, brokers, and web-brokers can, particularly in complex situations, take considerable resources and time, often requiring technical information and data and outreach to consumers. The agency received multiple comments agreeing that extra time is needed for the review of complex cases. However, some of those commenters urged HHS to try to resolve suspension and termination cases as quickly as possible and not use the extra review time if not necessary.

Accurate And Complete Documentation Of Consumer Assistance

HHS has received complaints from consumers that the information their broker submitted in their Marketplace applications was incorrect, or that the broker submitted the application without their consent. For example, the agency notes that some applications include an attestation that the applicant is a U.S. citizen alongside an attestation that the applicant has no Social Security Number (SSN). This discrepancy can trigger a “data matching” issuer, and place the consumer at risk of having their coverage terminated. Inaccurate income or household information on applications can also place the consumer at risk of having to pay back any premium tax credits for which they were not eligible.

HHS has also observed that unauthorized enrollments through brokers impact underserved groups of consumers, particularly unhoused individuals and those with limited English proficiency, in “greater numbers” than other groups. Each year, HHS estimates that it investigates approximately 120 brokers, agents, or web-brokers. However, it has found that complaints about inaccurate or unauthorized applications are difficult to adjudicate because often the only evidence is the word of the consumer against the word of the broker.

The agency is thus finalizing a proposal to require agents, brokers, and web-brokers in the FFM and SBM-FPs to document that their clients (or authorized representatives) have reviewed and confirmed their eligibility information before they submit an application. The documentation must include the date the consumer reviewed the application, the consumer’s name (or authorized representative’s name), an explanation of the attestations in the application, and the name of the agent, broker, or web-broker providing the assistance. Acceptable forms of documentation could include the signature of the consumer or authorized representative, verbal confirmation captured in an audio recording, or a written response from the consumer or authorized representative to a communication sent by the agent, broker, or web-broker.

The final NBPP will also require agents, brokers, and web-brokers to document that they have received a consumer’s consent to assist them with a marketplace eligibility application. This consent must include the date, the consumer’s name (or authorized representative), and the name of the agent, broker, or web-broker. HHS is not prescribing exactly how consent must be obtained, but it can take the form of a signature or a recorded verbal authorization. Brokers, agents, and web-brokers must maintain a record of the consumer’s consent and confirmation of the accuracy of their eligibility information for at least 10 years and be able to produce it for HHS upon request.

HHS received many comments that the new documentation requirements will place a heavy burden on agents, brokers and web-brokers, requiring them to spend more time with individual clients and potentially reducing the numbers of people they can ultimately enroll. While the agency agreed that the new documentation requirements pose new burdens, they believe the benefits of encouraging the submission of accurate information outweigh the negative impact on agents, brokers, and web-brokers. They also note that they are providing agents, brokers, and web-brokers with multiple means by which to comply with the documentation requirements.

Prohibiting Mid-Year Terminations For Dependent Children Who Reach Maximum Age

Health plans and insurance issuers that offer coverage to dependent children must, under the ACA, allow those children to stay on their parent’s plan until age 26. Through its business rules, the FFM currently requires Marketplace issuers that cover dependent children to maintain their coverage on their parent’s plan until the end of the plan year in which they turn 26. To provide more clarity for QHP issuers and to reduce enrollee uncertainty about their coverage, the 2024 NBPP codifies this requirement into federal regulations. State-based Marketplaces (SBMs) have the option of implementing a similar rule. During the annual open enrollment period, the FFM will automatically enroll enrollees who turned 26 during the plan year into their own, separate plans, if otherwise eligible.

Many commenters supported this policy and none opposed it, although one commenter encouraged HHS to extend the policy to SBMs. HHS notes, however, that SBMs are allowed to establish their own operational practices and rules.

Rating Rules For Stand-Alone Dental Plans

The draft 2024 NBPP included two proposals for stand-alone dental plans (SADPs) in all Marketplaces, including SBMs. The first required that SADP issuers set premium rates and determine plan eligibility based on an enrollee’s age at the time the policy is issued or renewed, beginning in 2024. Although they have had flexibility to set a different date, the vast majority of SADP issuers use an enrollee’s age on the policy effective date to set rates. With public comments uniformly in support of this proposal, HHS is finalizing this policy without modifications.

The second proposal requires SADP issuers, as a condition of Marketplace certification, to submit only guaranteed rates for the plan year, not estimates. Requiring guaranteed rates helps prevent inaccurate determinations of APTCs for the pediatric dental portion of a consumer’s premium, which will primarily benefit lower-income consumers who qualify for APTCs. Public comments all supported the proposal, and HHS is finalizing the policy without modifications.

Marketing Name Requirements For Qualified Health Plans

In the proposed NBPP, HHS reported receiving complaints from consumers about misleading and deceptive plan marketing names. Upon investigation, HHS and state insurance regulators found that many plans use marketing names with cost-sharing or other benefit details that are incorrect or misleading. For example, some plans have marketing names that mention limits on cost-sharing amounts that in fact are only available for a certain prescription drug or provider network tier, include dollar amounts that do not specify what they refer to, or use “HSA” in the plan name when the plan does not allow the enrollee to set up an HSA. HHS thus proposed to require that plan and plan variation marketing names include correct information, and not include content that is misleading.

In the final rule, HHS is finalizing the policy as proposed and intends to work with state insurance regulators during the annual Marketplace plan certification process to monitor compliance. Most public comments applauded the policy, as well as HHS’ intention to collaborate with state insurance regulators on enforcement. Some also urged HHS to adopt a standard template for plan marketing names; although HHS declined to do so for PY 2024, the agency agreed that clear and comparable information in plan names is important to support informed consumer decision-making.

A few commenters opposed the proposal, arguing that insurance issuers needed flexibility in the marketing practices, and that states should be exclusively responsible for regulating plan marketing names. In response, HHS noted that their investigation uncovered several egregious examples of plan marketing names that are at best misleading and potentially deliberately deceptive, such as plans that describe themselves as “$0 cost-sharing” without noting that it only applies to a limited number of visits.

Establishing A Timeliness Standard For Notices Of Payment Delinquency

When a plan enrollee gets behind in making premium payments, HHS requires Marketplace issuers to send a notice to the enrollee so they have an opportunity to pay unpaid premiums and avoid a termination of their coverage. In conducting oversight of issuers, the agency found that some were delaying sending these notices, in extreme cases preventing the enrollee from correcting their payment delinquency. HHS is thus establishing a timeliness standard for issuers in FFM and SBM-FP Marketplaces. Those issuers must send notices within 10 business days of the date the issuer should have discovered that the enrollee was in delinquency, although HHS notes that state insurance regulators may establish a more stringent standard, if they wish. Most commenters supported the timeliness requirement.

Author’s Note

The Robert Wood Johnson Foundation provided grant support for the author’s time researching and writing this post.

Sabrina Corlette, “Final 2024 Payment Rule, Part 1: Insurance Market Rules and Consumer Assistance,” Health Affairs Forefront, April 19, 2023, https://www.healthaffairs.org/content/forefront/final-2024-payment-rule-part-1-insurance-market-rules-and-consumer-assistance Copyright © 2023 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.