CMS-9915-F 330
providers.
216
HHS is of the view that allowing flexibility for issuers to include savings they share
with enrollees in the numerator of the MLR would increase issuers’ willingness to undertake the
investment necessary to develop and administer plan features that may have the effect of
increasing health care cost transparency, which in turn could lead to reduced health care costs.
HHS has in the past exercised its authority under section 2718(c) of the PHS Act to take
into account the special circumstances of different types of plans by providing adjustments to
increase the MLR numerator for “mini-med” and “expatriate” plans,
217
student health insurance
plans,
218
as well as for QHPs that incurred Exchange implementation costs
219
and certain non-
grandfathered plans (that is, “grandmothered” plans).
220
This authority has also been exercised to
recognize the special circumstances of new plans
221
and smaller plans.
222
Consistent with this
approach, HHS proposed to exercise its authority to account for the special circumstances of new
216
Austin, D. A., and Gravelle, J. G. “Congressional Research Service Report for Congress: Does Price
Transparency Improve Market Efficiency? Implications of Empirical Evidence in Other Markets for the Healthcare
Sector.” Congressional Research Service. July 24, 2007.”Available at: https://fas.org/sgp/crs/secrecy/RL34101.pdf
.
217
See 45 CFR 158.221(b)(3) for “mini-med” plans and 45 CFR 158.221(b)(4) for “expatriate” plans; see also the
Health Insurance Issuers Implementing Medical Loss Ratio (MLR) Requirements Under the Patient Protections and
Affordable Care Act; Interim Final Rule; 75 FR 74864, 74872 (Dec. 1, 2010).
218
See 45 CFR 158.221(b)(5); see also the Student Health Insurance Coverage; Final Rule, 77 FR 16453,
16458-16459 (Mar. 21, 2012).
219
See 45 CFR 158.221(b)(7); see also the Exchange and Insurance Market Standards for 2015 and Beyond; Final
Rule; 79 FR 30240, 30320 (May 27, 2014).
220
See 45 CFR 158.221(b)(6); see also 79 FR 30240, 30320 (May 27, 2014). See 45 CFR 158.221(b)(6); see also 79
FR 30240, 30320 (May 27, 2014); see also 45 CFR 158.221(b)(6); see also 79 FR 30240, 30320 (May 27, 2014).
“Grandmothered” plans is a term for certain non-grandfathered coverage in the small group and individual health
insurance markets. Since 2014, CMS has permitted, subject to applicable State authorities, health insurance issuers
to continue certain coverage that could not otherwise remain in place without significant changes to comply with
PPACA. Such health insurance coverage would not be treated as out of compliance with sections 2701-2707 and
2709 of the PHS Act and section 1312(c) of PPACA (group health plans must still comply with section 2704 and
270505 of the PHS Act). See Extended Non-Enforcement of Affordable Care Act-Compliance With Respect to
Certain Policies, available at
https://www.cms.gov/CCIIO/Resources/Regulations-and-
Guidance/Downloads/Limited-Non-Enforcement-Policy-Extension-Through-CY2020.pdf and
https://www.cms.gov/files/document/extension-limited-non-enforcement-policy-through-calendar-year-2021.pdf.
221
See 45 CFR 158.121; see also 75 FR 74864, 74872-74873 (Dec. 01, 2010) and the HHS Notice of Benefit and
Payment Parameters for 2018 Final Rule; 81 FR 94058, 94153-94154 (Dec. 22, 2016).
222
See 45 CFR 158.230 and 158.232; see also 75 FR 74864, 74880 (Dec. 01, 2010).