HHS Issues Guidance re: Market Rules, Essential Health Benefits and Wellness Programs

November 20, 2012

HHS Issues Guidance re: Market Rules, Essential Health Benefits
and Wellness Programs

On November 20, 2012, several Federal agencies released Proposed Rules on Patient Protection and Affordable Care Act (PPACA) provisions:





Comments Due

Health Insurance Market Rules and Rate Review

Centers for Medicare & Medicaid Services (CMS)

Proposed Rule

Insurers and group health plans

Proposed rules relating to:
- Guaranteed issue coverage for individuals with pre-existing conditions if coverage is purchased during open or special enrollment periods.
- Limiting premium variance based on age to 3 to 1 and tobacco use to 1.5 to 1.
- Requiring insurers to maintain a single risk pool for their small group and individual policies in each state.
- Allowing catastrophic plans for young adults and people for whom coverage would otherwise be unaffordable.
The proposed rule also includes some changes to the current rate review program. Insurers will have to submit all individual and small group rate increases to HHS beginning in 2014.

30 days

Standards Related to Essential Health
Benefits, Actuarial Value, and Accreditation


Proposed Rule

Insurers and group health plans

Outlines health insurance issuer standards related to the coverage of essential health benefits (EHB) and the determination of actuarial value (AV) and minimum value; provides state flexibility to shape how EHB are defined; provides for limits on cost sharing.
- Proposes a timeline for when issuers offering coverage in a Federally-facilitated Exchange or State Partnership Exchange must become accredited.
- Proposes an application process for accrediting entities seeking to be recognized to fulfill the accreditation requirements for issuers offering coverage in any Exchange.
Tools & Resources
Benchmark Plans by state:
AV Calculator (click “ok” when asked for a password):

AV Calculator Methodology:

Proposed Rate Review Data Template:

30 days

Wellness Programs in Group Health Plans

HHS, Labor and the Treasury

Proposed Rule

Insurers and group health plans

Effective for plan years beginning on or after January 1, 2014.
Expand existing HIPAA wellness program rules to apply in the individual market. The maximum reward will increase from 20% to 30% of the cost of health coverage. For programs designed to prevent or reduce tobacco use, the maximum reward will be 50%.

60 days

HHS News Release
Includes Fact Sheets for all three proposed rules


Cigna is currently reviewing the guidance and tools, and will provide additional information on these provisions as we complete our analyses in the coming weeks.

We want to wish you and yours a healthy, happy Thanksgiving! Also, in light of Cigna's holiday closure on Friday 11/23, if additional guidance is released late Wednesday or on Friday, we will communicate it to you early next week.

Meanwhile, we encourage you to bookmark our health care reform website, InformedOnReform.com.


This document is for general informational purposes only. While we have attempted to provide current, accurate and clearly expressed information, this information is provided "as is" and Cigna makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

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