CMS tweaks CO-OP, special enrollment period regulations

The federal government has adjusted the regulations surrounding two of the more controversial aspects of the Affordable Care Act--special enrollment periods (SEPs) and consumer operated and oriented plans (CO-OPs).

Health insurers have lobbied for changes to SEPs, which they say some consumers abuse in order to switch in and out of coverage, leading to increased costs. In response, the Centers for Medicare & Medicaid Services (CMS) has outlined how it plans to tighten its regulations, including the creation of new documentation requirements for customers who want to access SEPs.

In an interim final rule released Friday, CMS amended SEP eligibility requirements for those who have permanently changed residences to ensure that the sign-up periods are available only to those who had minimum essential coverage for one or more days in the 60 days before moving. "This change aligns the eligibility requirements with the intent of this special enrollment period (that is, to afford individuals the full range of plan options when they relocate), and promotes stability in the health insurance market," the rule states.

The rule also eliminates the Jan. 1, 2017, deadline for exchanges to offer advanced availability of the SEP for individuals who gain new access to coverage as a result of a permanent move, and for offering a new SEP for loss of a dependent or for no longer being considered a dependent due to divorce, legal separation or death. Instead, it leaves it up to the exchanges to implement each provision.

In reference to the CO-OPs, the rule amends governance requirements in order to permit the startup insurers to "facilitate private market transactions that can provide access to needed capital." Since CO-OPs won't be able to receive additional federal loans, an infusion of private capital would help them achieve stability and remain competitive, CMS says.

In addition, the rule also allows CO-OPs to recruit potential directors from a "broader pool of qualified candidates" by allowing representatives of licensees of non-marketplace health plans to sit on CO-OP boards and removing the requirement that a majority of voting directors be members of the CO-OP, among other provisions.

More than half of the original 23 CO-OPs have folded, mainly due to financial troubles, leading to mounting scrutiny from Congress members who question CMS' oversight of the small insurers.

To learn more:
- here's the rule (.pdf)