CMS to continue building better, more affordable insurance marketplace

Jan. 18, 2021

The Centers for Medicare & Medicaid Services (CMS) issued a rule finalizing a number of proposed provisions for the annual Notice of Benefit and Payment Parameters for 2022 (the 2022 payment notice), continuing the agency’s efforts to build a better and more affordable insurance marketplace for Americans.

CMS anticipates continuing to review comments and finalizing other proposed policies in a second final rule to be published at a later date. Working to address comments and feedback from the public after publishing the proposed 2022 payment notice in November 2020, CMS is using this first final rule to tackle a number of critical priorities. The rule finalizes changes to reduce consumer costs, empower states to develop their own unique plans, accelerate innovation, and clarify program requirements.

“Since 2017, premiums are down, coverage options are up, and we have stabilized the individual market with better care at lower costs,” said CMS Administrator Seema Verma. “The actions we’re taking today ensure these improvements can continue tomorrow, because we must never be satisfied when too many Americans still cannot afford coverage in the individual market.”

The policies and parameters announced today give consumers, insurers, and other stakeholders across the healthcare industry ample time to prepare for implementing top priorities in 2022. Those priorities include:

  • Lower premiums. For 2022, CMS will reduce the user fee for qualified health plans (QHPs) sold through a Federally facilitated Exchange (FFE) from 3.0 percent to 2.25 percent of premium. This is an additional reduction beyond the 0.5 percentage point reduction in the user fee rate included in the 2020 payment notice. CMS also is finalizing a reduction in the user fee for issuers offering plans through State-based Exchanges that use the federal platform (SBE-FPs) from 2.25 percent to 1.75 percent of premium. In years past, including 2020 and 2021, this provision has been key to reducing insurance premiums to deliver an eight percent average premium reduction across states with exchanges using since the 2018 coverage year. These reductions reflect successful cost-saving measures CMS implemented over the past several years to strengthen program integrity and improve technological infrastructure.
  • Flexibility to help states develop their own healthcare programs that meet unique local needs. Implemented through 1332 waivers, this update solidifies an important opportunity for states to waive certain statutory requirements to create health programs tailored to their own citizens, subject to federal approval. The final rule codifies in regulatory text guidance published in 2018 to give states greater certainty over how the federal government will evaluate and monitor section 1332 waivers moving forward.
  • New options for states to develop next generation Exchanges that leverage web-brokers and insurance issuers for the direct purchase of QHPs. This approach would rely on web-brokers and issuers to serve as the primary consumer-facing means to apply for and enroll in individual market QHPs through the Exchange. Under these options, Exchanges would retain responsibility for ensuring that participating web brokers and insurers meet all applicable consumer protections, as well as remain responsible for making all eligibility determinations, performing required verifications of consumer application information, and meeting all statutory and regulatory requirements for operating an Exchange.
  • Protective provisions for consumers covered through certain health reimbursement arrangements (HRAs). HRAs are an alternative to “traditional” group health plans that allow employers to provide defined pre-tax reimbursements to employees for qualified medical expenses, including monthly premiums. In response to questions and confusion regarding policy, the 2022 payment notice clarifies that issuers of individual market QHPs must 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).
  • Greater clarity on building plans that lack a traditional provider network. Some insurance plans do not use a provider network, meaning they do not vary benefits based on whether enrollees receive services from an “in-network” or “out-of-network” provider. To address lingering confusion regarding regulatory requirements that might limit plan innovations, the 2022 payment notice clarifies that, to have such plans certified as QHPs, issuers of these plans need not pursue compliance with network adequacy requirements applicable to QHPs, since their benefits do not vary based on a provider’s network status.

The final rule is at:

The fact sheet on this final rule is at:

CMS has the release.