Frequently Asked Questions

No. Since the fee due in 2014 is based on the health plan's 2013 book of business, the adjustment should only apply to the capitation rates for populations that the state covered under the managed care contract in 2013. For example, states that chose to expand Medicaid eligibility starting January 1, 2014, should not adjust the capitation rates for the new adult eligibility group to account for the fee due in 2014, because they were not covered by the managed care plans in 2013. In future years, the Health Insurance Providers Fee will continue to be based on the book of business for the immediately preceding year, so this concept will apply in calculating the fee if any new populations are added to a state's managed care program.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 159.2 KB)

FAQ ID:91181

The potential effect of the fee may be considered in the development of the capitation rates. If the state's actuary takes these potential effects into account in developing the non-benefit component of the capitation rate attributable to the Health Insurance Providers Fee, the assumptions underlying that analysis will be documented in the rate certification.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 159.2 KB)

FAQ ID:91196

Section 9010(h)(3) of the Affordable Care Act and the IRS Health Insurance Providers Fee regulations (78 FR 71476, 71483, November 29, 2013; available at www.irs.gov/businesses/corporations/affordable-care-act-provision-9010) exclude long-term care from the definition of health insurance for purposes of calculating a health plan's fee liability. Where long- term care services are paid a capitation rate separate from other services, these payments can be easily identified and should be excluded by the health plan when reporting premiums subject to the fee to the IRS. However, where long-term care services are not easily identified within the health plan's capitation rates, the health plans may need to consult with the state and their actuaries to determine the appropriate premium receipts to report to the IRS.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set.  (PDF, 159.2 KB)

FAQ ID:91391

CMS believes that the process for reimbursing a health plan for the Health Insurance Providers Fee that was contracted with the state in 2013, but not in 2014, is primarily a matter to be negotiated between the state and the health plan. It is reasonable for a state to make a retroactive adjustment to the 2013 contract year rates for that health plan as it is possible that the state's actuary did not take the Health Insurance Providers Fee into consideration when developing the 2013 rates. In that case, the state may treat the fee in the same manner as it would an error in the development of the rates, and submit any necessary adjustment to CMS for approval.

However, there may be barriers to such adjustments under the contract or applicable state laws. Retroactive rate adjustments for a health plan that has left the market must be made under the contract and within the federal two-year period for timely claims. See Question 3 for more information. Going forward, states that account for the fee on a retroactive basis may want to address rate adjustments due to market exit in the contract. States that account for the fee on a prospective basis will not encounter this issue.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 159.2 KB)

FAQ ID:91396

Information on when states intend to reimburse contracted health plans for the Health Insurance Providers Fee is established in the contract. States that elect to reimburse health plans for the fee once the amount is known should establish a timeframe for payment, typically between 30 to 90 days, after receipt and review of the health plan's assessment from the Internal Revenue Service.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 159.2 KB) 

FAQ ID:91401

It is reasonable to consider the Health Insurance Providers Fee in these arrangements as they may exist in the contract between the state and the health plan. While CMS does not have specific requirements as to how the Health Insurance Providers Fee should be considered under these arrangements, CMS does recommend that the Health Insurance Providers Fee is generally treated in the same way as other taxes and fees for these purposes.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 159.2 KB)

FAQ ID:91386

The regulation only prohibits insurance policies that would be sold ""in conjunction with"" enrollment in the Medicaid managed care plan. Section 438.104 alone does not prohibit a Medicaid managed care plan from providing information about a Qualified Health Plans (QHP) to potential enrollees who could enroll in such a plan as an alternative to the Medicaid managed care plan due to a loss of Medicaid eligibility or to potential enrollees who may consider the benefits of selecting an Medicaid managed care plan that has a related QHP in the event of future eligibility changes. However, Medicaid managed care plans should consult their contracts and the State Medicaid agency to ascertain if other provisions exist that may prohibit or limit such activity.

Section 438.104(b)(1)(iv) implements a provision in section 1932(d)(2)(C) of the Social Security Act, titled ""Prohibition of Tie-Ins."" In promulgating regulations implementing this provision, CMS clarified that we interpreted it to preclude tying enrollment in the Medicaid managed care plan with purchasing (or the provision of) other types of private insurance. We do not intend the statutory prohibition of tie-ins to apply to a discussion of a possible alternative to the Medicaid managed care plan, which a QHP could be if the consumer is determined to be not Medicaid eligible or loses Medicaid eligibility.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 138.58 KB)

FAQ ID:94351

States are encouraged to review their managed care contracts to clearly identify the legal entity with which they are contracted for Medicaid coverage since federal Medicaid managed care regulations do not address this aspect of contracting. If the party to the contract is an entity (such as a parent company) that has a contract with a state Medicaid agency to provide benefits as a Medicaid managed care plan and is also a QHP issuer, then some contractual provisions may apply to both. Although the federal Medicaid regulations do not apply to a QHP issuer or QHP, state law, regulation, or contract language may have implications for the QHP issuer. If changes are needed to narrow the scope of the contract to apply only to the Medicaid managed care plan, we encourage states to make those changes so as to ensure consistent understanding and application of the Medicaid contract terms.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 138.58 KB)

FAQ ID:94371

Yes. Responding to direct questions from consumers is not generally a violation of 42 CFR 438.104. Proactive consumer inquiries to a health plan for information about coverage options, benefits, or provider networks is no different than a consumer obtaining information from the health plan's website. So long as the limits on marketing are satisfied and respected (e.g., the information is accurate and does not mislead, confuse or defraud beneficiaries or the state Medicaid agency), responding to direct questions from potential enrollees with accurate information is not prohibited.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 138.58 KB)

FAQ ID:94391

There is no provision in 42 CFR 438.104 specifically addressing a Medicaid managed care plan's outreach to enrollees for eligibility purposes; therefore, it depends on the Medicaid managed care plan's contract with the state Medicaid agency. The federal regulation at 42 CFR 438.104 defines marketing as ""any communication, from an [Medicaid managed care plan] to a Medicaid beneficiary who is not enrolled in that entity, that can reasonably be interpreted as intended to influence the beneficiary to enroll in that particular [Medicaid managed care plan's] Medicaid product, or either to not enroll in, or to disenroll from, another [Medicaid managed care plan's] Medicaid product."" So long as information and outreach about the eligibility renewal process is neither directed to beneficiaries who are not enrolled with that Medicaid managed care plan, nor intended to influence the beneficiary to enroll in that particular Medicaid managed care plan-or to not enroll in, or disenroll from another Medicaid managed care plan-the activity is not within the scope of 42 CFR 438.104. Materials and information that purely educate an enrollee of that Medicaid managed care plan on the importance of completing the State's Medicaid eligibility renewal process in a timely fashion would not meet the federal definition of marketing. However, Medicaid managed care plans should consult their contracts and the state Medicaid agency to ascertain if other provisions exist that may prohibit or limit such activity.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 138.58 KB)

FAQ ID:94396