PowerPoint Presentation

COVERED CALIFORNIA POLICY AND ACTION ITEMS

August 19, 2021 Board Meeting

COVERED CALIFORNIA FOR SMALL

BUSINESS EMERGENCY REGULATIONS

Linda Anderson, Chief of Operations, Covered California for Small Business

BACKGROUND

□ Covered California was granted emergency rulemaking authority by the

Legislature through January 1, 2022 for the eligibility and enrollment

regulations for the individual and small business exchanges

□ Covered California for Small Business (CCSB) is presenting emergency

rulemaking for Action

□ Proposed changes clarify regulatory language and update requirements

related to eligibility and enrollment due to enrollment system

enhancement, benefitting small business consumers

□ This Emergency Regulation proposal was presented to the Board for

Discussion on June 17, 2021.

BACKGROUND CONTINUED

□ Proposing to expand CCSB’s product portfolio to allow up to four

contiguous metal tier plan offerings

Today’s Metal Tier Offerings:

Additional Proposed Expanded

Metal Tier Offerings to Include:

HIGHLIGHTS TO PROPOSED CHANGES AND RATIONALE

Section and Title Proposed Changes Rationale

Section 6520 (a)(1) - Employer and

Employee Application Requirements

Employer will no longer need to provide

billing address

Employer will only be required to provide

principal business address and mailing

address. Employer invoices will be sent to

the mailing address if different from

business address.

Section 6520 (a)(12)(C) - Employer and

Employee Application Requirements

The employer’s selection for one, two

contiguous, three contiguous, or four

contiguous metal tiers.

CCSB is proposing to expand contiguous

metal tier options for employers that will

allow employers and employees more

choice. This will allow for the employer

and employees more health plan choices

that will be beneficial to the consumers.

Aligns with the small business marketplace.

Section 6520 (a)(12)(E) – Employer and

Employee Application Requirements

Effective August 1, 2021, if qualified

employer is offering dental coverage to

qualified employees, the employer must

select a dental reference plan.

Added dental reference plan for

clarification. Reference plan is used to set

premium contribution. Dental has no

required minimum contribution.

HIGHLIGHTS TO PROPOSED CHANGES AND RATIONALE

Section and Title Proposed Changes Rationale

• Section 6520 (b)(10),(11) – Employer

and Employee Application Requirements

• Section 6532 (a)(1),(b)(2) – Employer

Payment of Premiums

Qualified employer understands that CCSB

will not consider the qualified employer

approved for health or dental coverage

until the employer’s first month’s total

premium payment are received.

For market and financial consistency and

accuracy, CCSB will no longer accept

premium payment that is between 85 to 99

percent of the total amount due. CCSB’s

enhanced customer portal will allow for

employers to make premium payment and

adjust premiums based on eligibility

additions or terminations in real-time.

Section 6520 (d) – Employer and Employee

Application Requirements

For new business enrollment, the employer

and employee application shall be

submitted to CCSB five days prior to the

requested effective date.

Added new business enrollment application

submission timeframe for clarification.

Section 6520 (d)(2) – Employer and

Employee Application Requirements

Social Security Number (SSN) or Taxpayer

Identification Number needed for

employee’s application.

Added SSN for clarification

HIGHLIGHTS TO PROPOSED CHANGES AND RATIONALE

Section and Title Proposed Changes Rationale

Section 6522 (a)(4)(A) – Eligibility

Requirements for Enrollment in the SHOP

Provision has been updated to allow the

QHP issuers agree to an earlier effective

date for the proposed changes.

This will allow QHP issuers enough time to

make any rate changes associated with the

participation requirements. As well, this

will allow CCSB to stay in sync with issuer’s

changes in eligibility requirements for the

small business marketplace.

Section 6522 (a)(4)(B) – Eligibility

Requirements for Enrollment in the SHOP

CCSB requires a minimum participation of

70% of eligible employees. Provided

clarification for qualified employee who

waives coverage that meets the definition

of minimum essential coverage (MEC).

Employees that waive their coverage due to

receiving health coverage elsewhere such

as employer-sponsored plans, federal or

state coverage, or any coverage that is

defined as MEC will not count towards the

employer’s participation calculation. This

will remove barriers for employers to

participate without increasing risk of

individuals enrolling without MEC. This will

align with the small business marketplace.

Section 6532 (e) – Employer Payment of

Premiums

Provided clarification of the 30 day Grace

Period if payment is returned for

insufficient funds.

Provides clarity for consumers of their

grace period if premium payments are

returned for insufficient funds.

NEXT STEPS

□ Government Code section 100504(a)(6) requires the Board to discuss

proposed regulations at a properly noticed meeting before adoption.

□ Requesting the Board to formally adopt the regulation package and file

with the Office of Administrative Law.

PUBLIC COMMENT

CALL: (877) 336-4440

PARTICIPANT CODE: 6981308

□ To request to make a comment, press 10; you will hear a tone indicating you are in the

queue for comment. Please wait until the operator has introduced you before you make

your comments.

□ If watching via the live webcast, please mute your computer to eliminate audio feedback

while calling in. Note, there is a delay in the webcast.

□ The call-in instructions can also be found on page two of the Agenda.

EACH CALLER WILL BE LIMITED TO TWO MINUTES PER AGENDA ITEM

NOTE: Written comments may be submitted to [email protected].

POLICY PLANNING FOR 2022 RENEWAL AND

OPEN ENROLLMENT

Katie Ravel, Director, Policy, Eligibility & Research Division

PROPOSAL TO AUTOMATICALLY MOVE

CERTAIN ENROLLEES FROM BRONZE TO

SILVER PLANS – EMERGENCY REGULATIONS

Katie Ravel, Director, Policy, Eligibility & Research Division

PROPOSED POLICY TO AUTOMATICALLY MOVE BRONZE

ENROLLEES TO SILVER PLANS

As initially presented in June, Covered California proposes to automatically

move Bronze enrollees into Silver during the upcoming renewal if:

□ Their income is under 150% FPL.

□ They can get a $0 PMPM Silver plan with the same carrier in the same

product. Enrollees in Bronze HDHPs will be moved to a Silver product

with the same carrier if the Silver product meets the $0 PMPM

requirement.

IMPLEMENTATION CONSIDERATIONS

Covered California has engaged state and federal partners, issuers and consumer advocates

in program development as follows:

□ Consulted with federal Center for Consumer Information and Insurance Oversight to

change Covered California’s renewal methodology.

□ Designed and sought feedback on a new consumer notice to clearly inform Bronze

enrollees about the action taken by Covered California, the consumer’s options and any

actions they need to take.

□ Consulted with California regulators.

 After consultation on program implementation approach, the Department of Managed

Health Care granted a limited waiver of the Knox-Keene protections that require

“same product renewal” due to the consumer-centric nature of this program.

 Consulted with the California Department of Insurance on alignment with Insurance

Code requirements related to renewals.

□ Developed draft emergency state regulation.

PROPOSED PROGRAM REGULATION

□ Revised the passive renewal hierarchy under 10 CCR § 6498(l) to allow

for auto-enrollment of certain bronze QHP enrollees into an enhanced

silver 94 QHP with $0 premium at renewal, as follows:

 Notwithstanding the process specified in subdivision (l)(1) through

(5) of this section, an enrollee whose household income is at or

below 150% of the FPL, who is determined by the Exchange to be

eligible for APTC and CSR, and who is currently enrolled in a

bronze-tier QHP shall be enrolled in a silver-tier QHP with the same

provider network as the enrollee’s current QHP offered by the same

QHP issuer, provided that the enrollee’s net monthly premium for the

silver-tier QHP is $0.00.

NEXT STEPS

□ Government Code section 100504(a)(6) requires the Board to discuss

proposed regulations at a properly noticed meeting before adopting

them.

□ Staff will request the Board to formally adopt the regulation package in

September so it can be filed with the Office of Administrative Law.

□ Any additional proposed changes to the proposed emergency

regulations for eligibility and enrollment in the individual market will be

communicated to stakeholders for review and commenting prior to

Action.

PLANNING FOR AUTO ENROLLMENT OF

INDIVIDUALS WHO LOSE MEDI-CAL

COVERAGE

Katie Ravel, Director, Policy, Eligibility & Research Division

OVERVIEW OF REQUIREMENT TO AUTOMATICALLY

ENROLL INDIVIDUALS WHO LOSE MEDI-CAL COVERAGE

□ California Senate Bill 260 (Chapter 845, Statutes of 2019) directs Covered California to automatically enroll

individuals who lose Medi-Cal coverage and gain eligibility for subsidized coverage.

□ Individuals will be enrolled in the lowest cost silver plan available, unless Covered California has information that

enables enrollment with the individual’s previous managed care plan.

□ Enrollment is to occur before the Medi-Cal termination date.

□ The first premium payment (binder payment) due date to be no sooner than the last day of the first month of

enrollment.

□ Covered California to provide a notice that includes the following information:

 The plan in which the individual is enrolled.

 The right to select another available plan and any relevant deadlines for that selection.

 How to receive assistance to select a plan.

 The right not to enroll in the plan.

 Information for an individual appealing their previous coverage through Medi-Cal

 A statement that services received during the first month of enrollment will only be covered by the plan if the

premium is paid by the due date.

AUTOENROLLMENT IMPLEMENTATION TIMING

□ SB 260 called for implementation no later than July 1, 2021, but

implementation was delayed due to COVID-19 impacts.

□ CalHEERS will be programmed to perform autoenrollments beginning

July 2022.

□ Covered California is considering a pilot phase prior to June of 2022 to

coincide with the anticipated end of the Public Health Emergency. Goals

of the pilot are to (1) test the outcomes of autoenrollment compared to

outreach alone and (2) refine business or other processes, if possible,

prior to full launch.

AUTOENROLLMENT IMPLEMENTATION PLANNING

Over the coming months, staff will update the Board on the following key planning

efforts underway to launch the auto-enrollment program:

□ Data analysis and forecasting

□ Eligibility and enrollment policy and regulation development

□ Consumer research

□ Eligibility and enrollment system development

□ Noticing and member communication development

□ Coordination and planning with Department of Health Care Services

□ Coordination and planning with issuers

□ Program evaluation planning

PUBLIC COMMENT

CALL: (877) 336-4440

PARTICIPANT CODE: 6981308

□ To request to make a comment, press 10; you will hear a tone indicating you are in the

queue for comment. Please wait until the operator has introduced you before you make

your comments.

□ If watching via the live webcast, please mute your computer to eliminate audio feedback

while calling in. Note, there is a delay in the webcast.

□ The call-in instructions can also be found on page two of the Agenda.

EACH CALLER WILL BE LIMITED TO TWO MINUTES PER AGENDA ITEM

NOTE: Written comments may be submitted to [email protected].

2022 QUALIFIED HEALTH PLAN AND

QUALIFIED DENTAL PLAN CERTIFICATION

SUMMARY

James DeBenedetti, Plan Management Division

INTRODUCTION

 All 11 existing QHP Issuers and 1 new QHP Issuer will be in Covered California’s

offering in Plan Year 2022.

 Covered California met with 12 QHP Issuers and 6 QDP issuers from late June through

mid-July for annual rate negotiation discussions.

 During negotiation meetings with QHP Issuers, Covered California also highlighted

several priorities areas for the 2023 contract refresh:

 Covered California 2023 contract reframing to focus on consumer-centric policies

 Quality Transformation Initiative (QTI) and Attachment 7 priority areas

 Partnership with Issuers to develop longer-term marketing and retention

strategies

COVERED CALIFORNIA 2022 QHP OFFERINGS

 Three of the 11 existing issuers are expanding coverage of existing products:

 Anthem EPO will expand into Alameda, Contra Costa, El Dorado, Marin, Napa,

Placer, Sacramento, San Francisco, San Mateo, Solano, Sonoma and Yolo counties

(Regions 2-6, and Region 8)

 Blue Shield will bring its Trio HMO plan into portions of Monterey and Santa Barbara

counties (Regions 9 and 12)

 Valley Health Plan will expand into Monterey and San Benito counties (Region 9)

 NEW CARRIER - Bright HealthCare, which currently operates in 13 other states and

covers more than 500,000 people in the individual market, will begin offering coverage

in Contra Costa county (Region 5)

□ All Californians can now choose between two issuers, 94 percent from three or more, and

81 percent from four or more

COVERED CALIFORNIA 2022 QHP ISSUER RATES

 The individual market average rate change is 1.8 percent, with a three-

year average of 1.1 percent between 2020-2022

 The rate change reflects what unsubsidized consumers would pay –

both on and off-exchange. For subsidized consumers, their “net

premiums will change based on multiple factors including American

Rescue Plan subsidies, changes in second lowest silver.

□ Regional rates varied between a 5.8% decrease (Region 1) and a 3.4%

increase in Region 3 (Sacramento, Placer, El Dorado, and Yolo

counties)

 2022 rate and coverage details are available at:

https://hbex.coveredca.com/data-research/

 Rates are provisional and subject to regulator review

COVERED CALIFORNIA 2022 QHP RATES

Factors contributing to the 1.8 percent average rate increase include:

 Covered California’s strong and healthy enrollment due to the subsidies

provided by the American Rescue Plan, and the anticipation that this

strong enrollment trend will continue during the special-enrollment

period lasting until December 31, 2021

 Continued and improving consumer risk mix. Issuers indicated that new

enrollees have had a positive impact on reducing the risk and

associated insurance premiums by up to 1 percent

 Premiums have been kept lower than the historical medical cost trend of

5 to 7 percent through other factors, such as the impact of the

COVID-19 pandemic and deferred care

2022 DENTAL PLAN OFFERINGS AND RATES

 The statewide weighted average rate change for individual and family dental plans

decreased by 1.04 percent

 Six QDP Issuers are returning for 2022; three of the six QDP Issuers have coverage area

changes:

 Anthem DHMO is expanding into San Francisco, Contra Costa and Alameda

counties (Regions 4, 5, 6)

 Delta DHMO is covering portions of San Diego county (Region 19)

 Dental Health Services is reducing coverage area in all regions with the exception of

Region 11, where there is no coverage in 2022. There are no changes in coverage

area for Region 18.

 Two QDP Issuers are withdrawing from the individual and family dental marketplace

(Access DHMO and Guardian DPPO)

 Approximately 9,800 enrollees will be affected

 Enrollees may choose a new dental plan during renewal. If enrollees do not take

action, they will be migrated to the lowest-cost dental plan of the same type (DHMO

or DPPO) in their region

PUBLIC COMMENT

CALL: (877) 336-4440

PARTICIPANT CODE: 6981308

□ To request to make a comment, press 10; you will hear a tone indicating you are in the

queue for comment. Please wait until the operator has introduced you before you make

your comments.

□ If watching via the live webcast, please mute your computer to eliminate audio feedback

while calling in. Note, there is a delay in the webcast.

□ The call-in instructions can also be found on page two of the Agenda.

EACH CALLER WILL BE LIMITED TO TWO MINUTES PER AGENDA ITEM

NOTE: Written comments may be submitted to [email protected].

QUALIFIED HEALTH PLAN ISSUER

CONTRACT REFRESH AND PATH FORWARD

James DeBenedetti, Plan Management Division

CONSUMER-CENTRIC FRAMEWORK

As Covered California builds on the robust competition and stability of the past seven years, it

needs continue its consumer-centric frame as it looks considers adding or removing carriers.

Across the board, but in particular when having more than four or five carriers in a given

market, Covered California needs to balance the cumulative impact of new plans and offerings

to the current product portfolio, considering:

 The positive benefit to consumers of added meaningful choice;

 Whether after the fourth carrier, the positive benefits of price competition drop significantly

and there is risk of a negative impact on consumer decision-making by choice overload; and

 Whether having smaller enrollment across multiple carriers runs the risk of undercutting

efforts to align market signals to improve quality and minimize administrative burden on

providers.

As we seek to improve the offerings available to consumers, Covered California will actively

consider consumer-centric policies that would rise in importance as the number of carriers

increases

CONSUMER-CENTRIC POLICY CONSIDERATIONS

When evaluating the addition or removal carriers or products for plan year 2023 and thereafter,

the following policies are under consideration:

 Continuity: promoting continuity of care for those currently enrolled and for those moving in and out of Covered

California (to/from both Medi-Cal and ESI)

 Quality and Equity: considering policies that would put financial, enrollment, or participation impacts on low

versus higher performing plans (e.g., implementing the financial incentives of the Quality Transformation

Initiative; not allowing auto-enrollment into “low quality” plans; considering not allowing participation of “low

quality” plans)

 Distinct/Unique Offerings: seeking to have consumer options that are truly differentiated (e.g., unique providers;

integration strategies; ties to underserved populations, etc.)

 Meaningful Consumer Benefit: assessing the benefit of “high cost” products with very small enrollment

 Geographic Reach/Regional Participation: requiring full regional coverage and/or pathway to full coverage within

3 years

 Product Mix: limiting multiple product offerings from each carrier

 Single Risk Pool Requirement: more express standards related to rate setting differentials across metal tiers

 Pricing Stability: requiring a multi-year rate increase “ceiling” from carriers entering new markets (whether new to

Covered California, or expansions from existing carriers) when initial pricing appears unsustainably low

QUALITY TRANSFORMATION INITIATIVE (QTI) AND ATTACHMENT 7

PRIORITY AREAS

During QHP Issuer meetings, Covered California confirmed our commitment and implementation goals for the

Quality Transformation Initiative (QTI) and Attachment 7 priority areas for the new 2023-2025 contract:

 QTI: Covered California is developing a penalty program for quality and equity performance for the new

2023-2025 contract period, with 2022 as a pilot year, to catalyze improvement in health plan quality. The

program will place 1% of premium at risk in 2023, with increases phased in over time, for performance

on a parsimonious set of measures.

 Attachment 7: Covered California is refreshing the health equity, quality, and delivery system

transformation requirements for the new 2023-2025 contract period, building on the substantial changes

made in the 2022 amendment. The requirements will increase focus on data and outcomes, promote

alignment with other public purchasers, and emphasize the following key strategic priority areas:

 Disparities reduction

 Behavioral health

 Effective primary care

 Affordability and cost

 Data exchange

MARKETING AND RETENTION STRATEGY

 Covered California is exploring alternative strategies to promote overall

enrollment and will be working with Issuers to identify common principles related

to acquisition activities. Some items for consideration include:

 Shared responsibility to invest in marketing and retention

 Establishing goals to increase overall marketplace enrollment

 Consumer awareness of and trust in the partnership between Covered

California and its contracted Issuers

 Covered California and QHP Issuers are securing a vendor who will help identify

longer-term strategies and methodologies to determine, develop, and measure

best approach to marketing and retention efforts, focus on how and where

investments will create the most impact, and promote affordability by investing

efficiently and effectively across the full spectrum of consumer interaction

PUBLIC COMMENT

CALL: (877) 336-4440

PARTICIPANT CODE: 6981308

□ To request to make a comment, press 10; you will hear a tone indicating you are in the

queue for comment. Please wait until the operator has introduced you before you make

your comments.

□ If watching via the live webcast, please mute your computer to eliminate audio feedback

while calling in. Note, there is a delay in the webcast.

□ The call-in instructions can also be found on page two of the Agenda.

EACH CALLER WILL BE LIMITED TO TWO MINUTES PER AGENDA ITEM

NOTE: Written comments may be submitted to [email protected].