Guidance for QHP Issuers in the Individual Market FFM Regarding

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Date: August 13, 2014
From: Center for Consumer Information and Insurance Oversight, Centers for Medicare &
Medicaid Services (CMS)
Title: Health Insurance Marketplaces Guidance
Subject: Bulletin 11: Guidance for QHP Issuers in the Individual Market FFM Regarding
Individuals Who Are Determined Not to be Qualified Individuals Due to Data Matching Issues
This guidance covers a topic related to continuation of coverage in the individual market outside
of the Federally-facilitated Marketplace (FFM) for current enrollees who lose eligibility for
Marketplace coverage for the 2014 benefit year. CMS expects to publish new guidance for
issuers regarding enrollment during benefit year 2015.
This guidance works in conjunction with previously issued rulemaking and guidance, including
the December 17, 2013 Interim Final Rule, 1 the FFM Enrollment Operational Policy and
Guidance issued in draft on October 3, 2013, 2 the Exchange and Insurance Market Standards for
2015 and Beyond final rule published on May 27, 2014, 3 and all previously released bulletins,
except where otherwise indicated. The following bulletin is attached:
•
1
Bulletin 11: Guidance for QHP Issuers in the Individual Market FFM Regarding
Individuals Who Are Determined Not to be Qualified Individuals Due to Data
Matching Issues
Patient Protection and Affordable Care Act; Maximizing January 1, 2014 Coverage Opportunities, 78 Fed. Reg. 76212
(Dec. 17, 2013).
2
http://www.cms.gov/CCIIO/Resources/Regulations-andGuidance/Downloads/ENR_OperationsPolicyandGuidance_5CR_100313.pdf.
3
79 Fed. Reg. 30240 (May 27, 2014).
Guidance for QHP Issuers in the Individual Market FFM Regarding Individuals Who Are
Determined Not to be Qualified Individuals Due to Data Matching Issues
Consumers enrolled in individual market qualified health plans (QHPs) through the Federallyfacilitated Marketplace (FFM) are notified if they need to submit documentation to the FFM in
order to verify information on their application. Enrollees who do not submit sufficient
documentation to the FFM within the timeframe specified will have their eligibility determined
using the information contained in the trusted electronic data sources used for verification. In
some cases, enrollees will not be able to be determined eligible for coverage through the
Marketplace based on information contained in those sources, and will therefore be determined
not to be qualified individuals. These enrollees will lose eligibility for enrollment in a QHP
through the Marketplace. Such cases include when the verification sources cannot establish
information, and the enrollee does not submit sufficient documentation of his or her citizenship,
status as U.S. national, or lawful presence.
When the FFM cannot resolve a data matching issue, resulting in an enrollee no longer being a
qualified individual, the FFM will send the QHP issuer an 834 termination transaction notifying
the issuer of the FFM’s termination of the enrollee’s Marketplace enrollment and termination of
eligibility for advance payments of the premium tax credit (APTC) and/or cost-sharing reductions
(CSR), if applicable. This termination will be effective on the last day of the month during which
the FFM determines that the individual is not a qualified individual. The 834 termination
transaction will contain a maintenance reason code and an additional maintenance reason
identifying the transaction as resulting from a data matching issue.
For purposes of benefit year 2014, CMS will consider issuers to have met their obligations with
regard to consumers’ individual market health insurance enrollment if they comply with this
operational guidance. CMS expects to publish new guidance for issuers regarding termination of
Marketplace enrollment in benefit year 2015.
An individual who loses Marketplace coverage due to a data matching issue will be directed to
the QHP issuer to pursue continuation of his/her coverage outside the Marketplace. The
individual will not receive any APTC and/or CSR for any coverage outside the Marketplace. The
individual will generally be eligible for a special enrollment period (SEP) based on a loss of
coverage or change in eligibility for APTC/CSR. The issuer is expected to work with the
individual to avoid gaps in coverage, and is encouraged to apply any amounts paid toward
deductibles and out-of-pocket limits toward the individual’s coverage outside the Marketplace.
In order to terminate the Marketplace enrollment status of the individual who was determined not
to be a qualified individual, the FFM will send the QHP issuer an 834 transaction notifying the
issuer of the FFM’s termination of the enrollment group’s Marketplace enrollment status and
termination of eligibility for APTC/CSR, if applicable. It is anticipated that, in most situations, the
members of the enrollment group who remain eligible for coverage through the Marketplace
would constitute an enrollment group that can be accommodated by the existing Marketplace
coverage. For example, if two parents and two children are in an enrollment group and one
parent loses eligibility for coverage through the Marketplace, the remaining three members could
still constitute a valid enrollment group.
If the remaining members of the enrollment group are still eligible for coverage through the FFM
and APTC/CSR, if applicable, they will be able to retain their Marketplace coverage and their
APTC/CSR, if applicable. The FFM will then send an 834 enrollment transaction to the issuer,
excluding the individual who was determined not to be a qualified individual, for the remaining
members of the enrollment group to enroll them into the same QHP through the FFM. This
transaction will reflect any changes to APTC/CSR, if applicable, and will have an appropriate
effective date calculated to prevent gaps in coverage. The eligible members of the enrollment
group remaining in coverage through the Marketplace will need to pay any subsequently charged
premiums in order to continue the coverage. The FFM will send the household contact a notice
indicating any changes to eligibility, including the termination of the applicable individual(s)
from eligibility for coverage through the Marketplace, in addition to any applicable changes to
APTC/CSR. If the members of the enrollment group who remain Marketplace eligible would like
to change from the Marketplace QHP in which they were automatically re-enrolled, they will
need to return to their Marketplace application and use the “report a life change” function to
attest to losing coverage in order to receive a special enrollment period (SEP).
Where the enrollee who is determined not to be a qualified individual is the subscriber of the plan,
the issuer is expected to apply any amounts previously paid toward deductibles and out-of-pocket
limits toward the coverage of the remaining members of the enrollment group. Where the
enrollee who is determined not to be a qualified individual is not the subscriber of the plan, and the
QHP allows for removal of a dependent as an amendment to the policy, the issuer must apply any
amounts previously paid toward deductibles and out-of-pocket limits toward the coverage of the
remaining members of the enrollment group.
There also may be situations in which the removal of one or more members from an enrollment
group will result in a remaining group of enrollees that does not constitute a valid enrollment
group based on the issuer’s business rules. For example, some issuers may not cover two
children without an adult on a single family policy. If the members of the enrollment group who
remain eligible for coverage through the Marketplace no longer constitute a valid enrollment
group accepted by the issuer, the 834 enrollment termination transaction for the entire enrollment
group will not be followed by an associated 834 enrollment transaction. The eligible members of
the enrollment group remaining in the Marketplace will receive a special enrollment period
(SEP) if the removal of an individual who was determined no longer eligible for coverage
through the Marketplace results in the remaining members of the enrollment group being unable
to re-enroll into their same QHP through the Marketplace. The household contact will receive a
notice from the FFM indicating that a SEP is available for the members of the enrollment group
who are determined to still be qualified individuals.
During the SEP, the Marketplace-eligible members of the enrollment group may select the same
QHP through the FFM. If the Marketplace-eligible members enroll in the QHP under which they
were previously covered, or select to enroll in the corresponding self-only QHP, or any
combination thereof, then the QHP issuer is expected to apply any amounts previously paid
toward deductibles and out-of-pocket limits to reflect the coverage as a continued enrollment. In
order to prevent a gap in coverage, the enrollment group will receive an effective start date for
the 1st of the month following the effective termination date specified in the 834 termination
transaction.
If necessary, the appropriate effective date of coverage will be communicated to issuers through
the Health Insurance Casework System (HICS) in order to prevent a gap in coverage.
Late Submission of Documentation for Data Matching Issues
Individuals whose Marketplace enrollment status and eligibility for APTC/CSR, if applicable, are
terminated because they were determined not to be qualified individuals due to their failure to
submit sufficient data-matching documentation will be provided an opportunity to re-enroll in
individual market coverage through the FFM outside of the open enrollment period by producing
sufficient documentation to resolve the data matching issue. In accordance with 45 CFR
155.420(d)(9), the FFM will provide a 60-day SEP with a retroactive effective date for an
individual described above who 1) attests that s/he submitted the requested supporting
documentation to the FFM during the period of time provided for resolution of the data matching
issues, 2) the verification sources are able to establish information based on the trusted electronic
data sources or using the sufficient documentation submitted to resolve the data matching issue,
and 3) is determined eligible for enrollment in a QHP through the Marketplace. This is intended
to accommodate any time lags due to mailing and processing of documents.
Under the SEP, the individual will be able to select new individual market QHP coverage
through the Marketplace. The individual described above, who attests to having submitted
sufficient documentation within the period of time provided for resolution, will receive a
retroactive effective date to avoid potential gaps in coverage. The new enrollment will have an
effective date that is retroactive to the day after the effective date of the termination of
Marketplace enrollment status and eligibility for APTC/CSR, if applicable. The appropriate
effective date of coverage will be communicated to issuers through HICS.
For an individual who 1) submits sufficient documentation within 60 days after the effective date
of the termination of his/her Marketplace enrollment status and eligibility for APTC/CSR, and 2)
is determined eligible for enrollment in a QHP through the Marketplace, in accordance with 45
CFR 155.420(d)(9), the FFM will provide a 60-day SEP with a prospective date of coverage that
will take effect on the first day of the month following plan selection. If necessary, the
appropriate effective date of coverage will be communicated to issuers through HICS.
If, under the SEP, the individual selects the same coverage through the FFM under which s/he
was previously covered through the FFM, the issuer is expected to apply any amounts previously
paid toward deductibles and out-of-pocket limits toward the coverage enrolled in under the SEP.

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