This document is scheduled to be published in the Federal Register on 01/19/2021 and available online at federalregister.gov/d/2021-01175, and on govinfo.gov[Billing Code: 4120-01-P] DEPARTMENT OF THE TREASURY 31 CFR Part 33 RIN 1505-AC72 DEPARTMENT OF HEALTH AND HUMAN SERVICES 45 CFR Parts 155 and 156 [CMS-9914-F] RIN 0938-AU18 Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2022; Updates to State Innovation Waiver (Section 1332 Waiver) Implementing Regulations AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of Health & Human Services (HHS), Department of the Treasury. ACTION: Final rule. SUMMARY: This final rule sets forth provisions related to user fees for federally-facilitated Exchanges and State-based Exchanges on the Federal Platform. It includes changes related to acceptance of payments by issuers of individual market Qualified Health Plans and clarifies the regulation imposing network adequacy standards with regard to Qualified Health Plans that do not use provider networks. It also adds a new direct enrollment option for federally-facilitated Exchanges and State Exchanges and implements changes related to section 1332 State Innovation Waivers. DATES: These regulations are effective on March 15, 2021. FOR FURTHER INFORMATION CONTACT: Jeff Wu, (301) 492-4305, Rogelyn McLean, (301) 492-4229, Usree Bandyopadhyay, (410) 786-6650, Grace Bristol, (410) 786-8437, or Kiahana Brooks, (301) 492-5229, for general information. Aaron Franz, (410) 786-8027, for matters related to user fees. Robert Yates, (301) 492-5151, for matters related to the direct enrollment option for federally-facilitated Exchange states, State-based Exchanges on the Federal Platform, and State Exchanges. Erika Melman, (301) 492-4348, for matters related to network adequacy standards. Emily Ames, (301) 492-4246, for matters related to acceptance of payments by QHP issuers. Lina Rashid, (443) 902-2823, Michelle Koltov, (301) 492-4225, or Kimberly Koch, (202) 622-0854, for matters related to State Innovation Waivers. SUPPLEMENTARY INFORMATION: In the December 4, 2020 Federal Register, HHS and the Department of the Treasury published the “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards; Updates to State Innovation Waiver (Section 1332 Waiver) Implementing Regulations” proposed rule (85 FR 78572) (hereinafter referred to as the “proposed 2022 Payment Notice” or “proposed rule”) that proposed revisions to regulations in 31 CFR part 33 and 45 CFR parts 147, 150, 153, 155, 156, 158, and 184, and policies that would reduce fiscal and regulatory burdens across related program areas and provide stakeholders with greater flexibility. This final rule addresses only a subset of the policies and proposed regulatory revisions addressed in the proposed 2022 Payment Notice, including certain policies and related proposed revisions to regulations in 31 CFR part 33 and 45 CFR parts 155 and 156. HHS continues to review comments to the proposed 2022 Payment Notice and intends to address the remaining provisions in future rulemaking. Table of Contents I. Executive Summary II. Background A. Legislative and Regulatory Overview B. Stakeholder Consultation and Input C. Structure of Proposed Rule III. Summary of the Proposed Provisions to the HHS Notice of Benefit and Payment Parameters for 2022, Analysis of and Responses to Public Comments, and Provisions of the Final Rule A. Part 155 – Exchange Establishment Standards and Other Related Standards under the Affordable Care Act B. Part 156 – Health Insurance Issuer Standards under the Affordable Care Act, Including Standards Related to Exchanges IV. Summary of the Proposed Provisions for State Innovation Waivers, Analysis of and Responses to Public Comments, and Provisions of the Final Rule A. 31 CFR Part 33 and 45 CFR Part 155 – State Innovation Waivers V. Collection of Information Requirements A. ICRs Regarding State Innovation Waivers B. ICRs Regarding Exchange Direct Enrollment Option C. Submission of PRA-related Comments VI. Regulatory Impact Analysis A. Statement of Need B. Overall Impact C. Impact Estimates of the Payment Notice Provisions and Accounting Statement D. Regulatory Alternatives Considered E. Regulatory Flexibility Act F. Unfunded Mandates G. Federalism H. Congressional Review Act I. Reducing Regulation and Controlling Regulatory Costs I. Executive Summary American Health Benefit Exchanges, or “Exchanges,” are entities established under the Patient Protection and Affordable Care Act (PPACA)1 through which qualified individuals and qualified employers can purchase health insurance coverage in qualified health plans (QHPs). Many individuals who enroll in QHPs through individual market Exchanges are eligible to receive a premium tax credit (PTC) to reduce their costs for health insurance premiums and to receive reductions in required cost-sharing payments to reduce out-of-pocket expenses for health care services. On January 20, 2017, the President issued an Executive Order which stated that, to the maximum extent permitted by law, the Secretary of HHS (hereinafter referred to as “Secretary”) and heads of all other executive departments and agencies with authorities and responsibilities under PPACA should exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of PPACA that would impose a fiscal burden on any state or a cost, fee, tax, penalty, or regulatory burden on individuals, families, health care providers, health insurers, patients, recipients of health care services, purchasers of health insurance, or makers of medical devices, products, or medications. In the December 4, 2020 Federal Register, we2 published the proposed 2022 Payment Notice, which proposed to reduce fiscal and regulatory burdens across different program areas and to provide stakeholders with greater flexibility. In previous rulemaking, we established provisions and parameters to implement many PPACA requirements and programs. In this final rule, we are amending some of these provisions and parameters, with a focus on providing states with additional flexibilities, reducing unnecessary regulatory burdens on stakeholders, empowering consumers, and improving affordability. 1 PPACA (Pub. L. 111-148) was enacted on March 23, 2010. The Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised several provisions of PPACA, was enacted on March 30, 2010. In this rule, we refer to the two statutes collectively as the “Patient Protection and Affordable Care Act” or “PPACA”. 2 As this rule is jointly published by HHS and the Department of the Treasury, HHS clarifies that throughout this final rule, the term ‘we’ refers only to HHS. As we do every year in the HHS notice of benefit and payment parameters (Payment Notice), we are finalizing the user fee rates for issuers offering plans through the Exchanges using the federal platform. For the 2022 plan year, we are lowering the federally-facilitated Exchange (FFE) and State-based Exchange on the Federal Platform (SBE-FP) user fees rates to 2.25 and 1.75 percent of total monthly premiums, respectively, in order to reflect enrollment, premium and HHS contract estimates for the 2022 plan year. We are also finalizing a user fee rate for 2023 of 1.5 percent of total monthly premiums for FFE and SBE-FP states that elect in 2023 the direct enrollment option discussed later in the preamble. We are updating the standards related to QHP issuers’ acceptance of payments for premiums and cost sharing to require individual market QHP issuers to accept premium payments made by or on behalf of an enrollee in connection with an individual coverage health reimbursement arrangement (individual coverage HRA) or qualified small employer health reimbursement arrangement (QSEHRA). We are also providing a clarification to the network adequacy rules to reflect the longstanding interpretation that § 156.230 does not apply to plans seeking QHP certification that do not differentiate benefits based on whether or not enrollees receive covered services from providers that are members of the plan’s provider network. We are establishing a new direct enrollment option under which a State Exchange, SBE- FP, or an FFE state can elect to rely on direct enrollment to offer individual market consumers an enhanced QHP shopping experience. Under this option, instead of operating a centralized enrollment website, states may, with HHS approval, use direct enrollment technology to establish pathways to QHP issuers, web-brokers, and agents and brokers, to allow consumers to apply for and receive a determination or assessment of eligibility for insurance affordability programs and enroll in a QHP, or if applicable, be transferred to Medicaid or the Children’s Health Insurance Program (CHIP). The Secretaries of HHS and the Treasury (collectively, the Secretaries) are finalizing the proposal regarding State Innovation Waivers under section 1332 of PPACA, with modifications in response to comments, to codify many of the policies and interpretations outlined in the 2018 “State Relief and Empowerment Waivers” guidance (83 FR 53575)3 (hereinafter referred to as the 2018 Guidance) into section 1332 regulations governing waiver application procedures, monitoring and compliance, and periodic evaluations in order to give states certainty regarding the requirements to