Pediatric Dental Covered By QHP As An Essential Health Benefit

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1 Making Sense f Health Insurance Oversight in Califrnia kelchplicy.cm July 12, 2013 T: Frm: Subject: Plicymakers and interested stakehlders Debrah Kelch, Health Insurance Alignment Prject Pediatric Dental Essential Health Benefits FAQ Attached please find fr yur review and backgrund Frequently Asked Questins relating t pediatric dental essential health benefits in Califrnia. The Health Insurance Alignment Prject (Alignment Prject) develped this backgrund t infrm and supprt the current plicy discussins the state is having relating t hw best t ffer this benefit in the cntext f the federal Affrdable Care Act and state law. The Alignment Prject is funded by a grant frm the Califrnia Healthcare Fundatin t cnduct independent research and technical assistance aimed at advancing effective state implementatin f the federal Affrdable Care Act (ACA) health insurance market refrms, with a fcus n supprting cnsistency and unifrmity in cnsumer prtectin and public accuntability acrss state agencies respnsible fr market versight. The attached FAQs include detailed questins relating t the applicable federal laws and plicies (Questins 1-13) and Califrnia law and plicy (Questins 14-17). Questin 18 lays ut fr cnsideratin sme f the key issues and questins fr plicymakers as they deliberate n this issue given the framewrk f state and federal law and plicy. We hpe yu find it useful and infrmative. 1

2 Frequently Asked Questins (FAQs) Pediatric Dental Cverage in Califrnia Under the ACA Under the federal Affrdable Care Act (ACA), pediatric ral care is an essential health benefit, 1 ne f ten essential health benefits which, starting in 2014, must be included by health insurance issuers selling nngrandfathered individual and small grup cverage. 2 Inclusin f pediatric EHB dental cverage, mandated as an essential cmpnent f the brader package f cre essential health benefits, represents a change t the existing market fr dental insurance cverage where dental cverage is typically sld and purchased as a separate prduct, distinct and apart frm medical cverage. 3 This series f Frequently Asked Questins (FAQs) utlines key prvisins f federal and state law and plicy (as they are knwn as f this writing) that affect cverage fr pediatric dental services in Califrnia in tw sectins, highlighting federal law and plicy, and then fllwing with relevant Califrnia law and plicy applicable t the Califrnia Health Benefit Exchange ((Califrnia Exchange), branded as Cvered Califrnia). Federal Law and Plicy 1. Is pediatric dental cverage required t be cvered as an essential health benefit? Yes. Under the ACA, pediatric ral care (alng with pediatric visin care) is ne f ten essential health benefits that are minimum requirements fr nn-grandfathered cverage sld in the individual and small grup markets. 4 The ACA requires the Secretary f the Department f Health and Human Services (DHHS) t define the scpe f the essential health benefits and ensure that the benefits are equal t the benefits prvided under a typical emplyer plan. The ACA als requires the Secretary t ensure that if a standalne dental plan is ffered in an Exchange, qualified health plans (QHPs) 5 withut pediatric dental cverage will still be allwed. 6 1 ACA essential health benefits include at least the fllwing ten general categries: Ambulatry patient services; emergency services; hspitalizatin; maternity and newbrn care; mental health and substance use disrder services, including behaviral health treatment; prescriptin drugs; rehabilitative and habilitative services and devices; labratry services; preventive and wellness services and chrnic disease management; and pediatric services, including ral and visin care. 2 Grandfathered cverage refers t individual and small grup cverage in effect as f March 23, 2010, which cntinues t meet specific federal requirements, including limited benefit and cverage changes. Grandfathered plans are exempt frm sme f the ACA requirements that generally apply in the individual and small grup markets, including the essential health benefits requirement. 3 Natinal Assciatin f Dental Plans (NADP) and Delta Dental Assciatin. Offering Dental Benefits in Health Exchanges: A Radmap fr Federal and State Plicymakers. September Available nline at: United States Cde (USC) 18022(b). 5 Under the federal ACA, a QHP is a health cverage prduct r plan certified by an exchange t prvide cverage fr individuals r small emplyers wh chse t buy cverage in the exchange. In federal law, the health insurance cmpany r entity that ffers the QHP is referred t as the QHP issuer. In this FAQ, use f the term QHP refers specifically t cverage f the full scpe f essential health benefits, even thugh dental plans in the Exchange will als be certified as QHPs USC 18022(b). 2

3 Pursuant t federal guidance, 7 and subsequent federal rules, 8 states can chse frm amng ten designated benchmark r reference plan ptins t define essential health benefits, including plicies sld in the state t small and large emplyers and cverage prvided t federal and state emplyees in that state. If the benchmark the state chses des nt include cverage fr pediatric ral care, states must supplement r add a pediatric ral benefit based n either the pediatric dental benefits available t federal emplyees r dental benefits available t children enrlled in a state s separate Children s Health Insurance Plan (CHIP) What is meant by the term 9.5 plan? The term has emerged as shrthand fr cverage that includes all ten essential health benefits except fr pediatric dental cverage. 3. What prvisins f the ACA apply t pediatric dental cverage? Applicability f ACA prvisins t dental cverage depends n whether the cverage is ffered as an integral part f a health insurance plan r plicy cvering medical care (health plan) r as a separate r standalne dental plan. When prvided under a separate plicy, certificate, r cntract f insurance, r when they are therwise nt an integral part f a health plan, in federal law limited dental benefits are cnsidered excepted benefits 10 and thus are nt subject t many f the ACA insurance market refrms, such as guaranteed availability (guaranteed issue), guaranteed renewability f cverage, the prhibitin n pre-existing cnditin exclusins and ACA rating rules. 11 In a health plan that integrates health and dental cverage int ne plicy, the health plan is subject t the insurance market refrms f the ACA based n the market fr the plicy (i.e., individual, small grup, large grup, etc.). 7 Centers fr Cnsumer Infrmatin and Insurance Oversight (CCIIO). Essential Health Benefits Bulletin. December 16, Cde f Federal Regulatins (CFR) CFR (b)(2) CFR (c)(3)(i). 11 Centers fr Medicare and Medicaid Services (CMS). Affrdable Exchanges Guidance: Letter t Issuers n Federallyfacilitated and State Partnership Exchanges. April 5, See als: CMS. Qualified Health Plan Webinar Series FAQ #10: Selected Respnses. May 9,

4 4. What federal requirements apply t the ffering f pediatric dental cverage in state-administered Exchanges? 12 Exchanges must d all f the fllwing relating t pediatric dental cverage in the Exchange: Allw QHP issuers 13 in the Exchange t ffer a health plan that des nt cver pediatric dental as an essential health benefit. 14 Allw an issuer f stand-alne dental t ffer the plan thrugh the Exchange (either separately r in cnjunctin with a qualified health plan) if the dental plan prvides pediatric dental benefits that cmply with the pediatric essential health benefits dental requirement (pediatric EHB dental) 15 and the dental plan: (a) Includes and impses n annual r lifetime limits n pediatric EHB dental; (b) Meets the Exchange certificatin standards except fr thse QHP standards that cannt be met by dental plans; and (c) Otherwise cmplies with applicable federal laws relating t excepted dental benefits. 16 Cnsider the cllective capacity f stand-alne dental plans t ensure sufficient access t pediatric EHB dental cverage. 17 Cllect and display premium rate infrmatin fr QHPs and dental plans ffered in the Exchange, in a standardized and cmparable way, and prvide specified infrmatin including, fr example, premium rates and cst sharing, actuarial values, summary f benefits and specified infrmatin n quality and cnsumer satisfactin. 18 Exchanges may: Allw stand-alne dental plans t be ffered separately r in cnjunctin with a QHP; 19 If an Exchange determines that it is in the [best] interest f cnsumers, as a cnditin f certificatin, Exchanges can require QHPs t ffer and price the pediatric EHB dental separately. Hwever, absent the best interest determinatin by the Exchange, federal law des nt allw an Exchange t require QHPs t separately price and ffer the pediatric EHB dental State-administered Exchanges, federally-facilitated Exchanges and state partnership Exchanges are generally required t cmply with the same federal rules and standards regarding the selectin, certificatin and ffering f QHPs and standalne dental plans. This FAQ fcuses n Califrnia which has established a state-administered Exchange. 13 QHP issuers in the Califrnia Exchange must be either health insurers subject t the jurisdictin f the Califrnia Department f Insurance (CDI) r health care service plans licensed by the Department f Managed Health Care (DMHC) CFR (d) USC 18031(d)(2)(B)(i) CFR (a) CFR (c) CFR (b) CFR (b). In the Preamble t the Exchange final rule, (Federal Register, Vlume 77, N. 59, March 27, 2012, p ) CMS states that this means independent f a QHP r as a subcntractr t a QHP issuer, and limit stand-alne dental prducts t nly ne f these ptins CFR (c) cdifies the standard where the exchange must determine that ffering any QHP is in the interests f individuals and small emplyers [in the Exchange]. In the Preamble t the Exchange final rule (Federal Register, Vlume 77, N. 59, March 27, 2012, p ), CMS states that if an Exchange determines that having QHPs separately ffer and 4

5 5. In additin t ffering the pediatric EHB dental thrugh a stand-alne plan independent f any QHP what ptins are there fr Exchanges t ffer the pediatric EHB dental in cnjunctin with QHP cverage? Subsequent t the final Exchange rules issued in 2012, the Centers fr Medicare and Medicaid Services (CMS) identified tw ptins fr Exchanges t ffer pediatric EHB dental cverage in cnjunctin with a QHP either embedded r bundled with a QHP. Accrding t CMS, the pediatric EHB dental benefit is embedded in a QHP when it is ffered in the same way as all f the ther benefits in the plan, financed by a single aggregated premium, and used by the issuer t calculate the actuarial value (metal tier) f the QHP cverage. 21 Therefre, even if the QHP issuer cntracts with a dental issuer fr the benefit, the QHP issuer assumes the risks and liabilities fr all f the cverage, including the dental benefit, and presents cnsumers with ne evidence f cverage (cverage cntract r plicy) fr all ten essential health benefits. This is similar t instances where an issuer subcntracts with specialized health plans fr administratin f mental health r prescriptin drug benefits but retains the ultimate risk and legal respnsibility fr the cvered services. Fr purpses f the annual ut-f-pcket maximum, in an embedded ffering there wuld be just ne annual maximum applicable t all ten essential health benefits, including the pediatric EHB dental. CMS describes a bundled pediatric EHB dental as ne where the QHP issuer pairs with a separate standalne dental plan t ffer pediatric EHB dental cverage. In a bundled arrangement, the QHP issuer wuld assume the risk fr all essential health benefits except fr the pediatric EHB dental (9.5 plan) and the standalne dental plan wuld separately assume the risks and liabilities fr the pediatric EHB dental (.5 plan). Each ffering wuld be cnsidered a separate plan and the bundled dental plan wuld be cnsidered an excepted benefit, a stand-alne. Each f the tw plans wuld be held t the applicable standards fr the type f plan, QHP r stand-alne dental, including n issues such as ut-f-pcket maximums and actuarial value requirements which are discussed in mre detail belw. 22 This means, fr example, that as a standalne plan the bundled dental plan culd have a separate ut-f-pcket maximum fr the pediatric dental EHB. 6. S there are three ptins fr Exchanges t ffer the pediatric EHB dental? Yes. The pediatric EHB dental can be ffered by Exchanges thrugh sme cmbinatin f the fllwing structures: Embedded in a QHP that cvers all ten EHBs hwever the dental benefit is prvided, including a subcntract with a dental issuer (issuer ptin); In a stand-alne dental plan bundled with a QHP (issuer ptin); r In a stand-alne dental plan entirely separate and independent f any QHP. price pediatric dental cverage is in the interest f the cnsumer the Exchange may d s, but federal rules d nt require (r therwise allw Exchanges t require) that QHPs separately price and ffer pediatric EHB dental cverage. The CMS April 5 guidance repeated the same standard fr Exchanges related t the pediatric EHB dental with the additin f best interests f cnsumers [Emphasis added]. 21 CMS. Qualified Health Plan Webinar Series FAQ #10: Selected Respnses. May 9, Ibid. 5

6 7. What federal requirements apply t stand-alne dental plans when ffered in Exchanges? Stand-alne dental plans seeking t participate in Exchanges must meet the QHP certificatin standards fr participatin in an Exchange, unless the certificatin requirement cannt be met because the plan nly cvers dental benefits. 23 In additin, stand-alne dental plans in Exchanges are subject t the fllwing federal rules: Prhibitin n annual and lifetime limits. As an essential health benefit, pediatric EHB dental cverage must be ffered withut annual r lifetime limits. 24 Different ut-f-pcket limits. Out-f-pcket limits differ if the pediatric EHB dental is embedded r stand-alne (including a bundled stand-alne dental plan). In a QHP with the pediatric EHB dental included (embedded), the ACA limits an individual Exchange enrllee s annual share f csts (cpayments, deductibles and cinsurance, etc.) t the federal ut-f-pcket limit fr Health Savings Accunts, r $6,350 fr Fr a stand-alne dental plan cvering the pediatric EHB dental, federal rules allw fr a separate reasnable annual limit n cst sharing (abve what applies in the QHP the individual selects) applicable t in-netwrk dental services, as reasnable is defined by the Exchange. 26 N cst-sharing reductins. Pediatric EHB dental benefits prvided thrugh a stand-alne dental plan are nt subject t the cst-sharing reductins which reduce cnsumer cpayments, deductibles and cinsurance that are therwise available fr eligible individuals in a QHP. 27 The cst-sharing reductins wuld be applied t the pediatric EHB dental if embedded in a QHP cvering all ten essential health benefits. Dental-nly actuarial value requirements. Exchange QHPs must characterize the cverage they ffer based n fur categries f actuarial value, 28 smetimes referred t as metal levels r cverage tiers, as fllws: brnze (60% actuarial value), silver (70%), gld (80%) and platinum (90%); QHP issuers may als ffer a catastrphic plan which allws fr specific benefit limitatins and is available nly t adults under 30 and individuals with affrdability exemptins frm the federal individual cverage requirement. Stand-alne dental plans must ffer cverage fr pediatric dental EHB at 70% r 85% actuarial value. 29 Premium tax credit prtin allcated t dental. Advanced payments f the federal premium tax credits fr individuals and families must first apply t QHP premiums. Tax credits can nly apply t stand-alne pediatric EHB dental if, after the amunt f the tax credit which an individual r family is eligible fr is first applied t the QHP cverage they chse, there remains a credit t apply t the stand-alne dental cverage CFR (d) CFR (2)(a) referencing 45 CFR CFR CFR (a) CFR (b). 28 Actuarial value is a measure f the percentage f expected health care csts a specific plicy r plan will cver, with the remainder t be cvered by the enrllee CFR (b) Califrnia law impses additinal requirements n the cverage tier fferings f issuers in the Exchange and utside f the Exchange which are utlined belw in the sectin n Califrnia law CFR (e). 6

7 Federal rules establish a frmula fr determining the prtin f the advance payment f the premium tax credit that wuld be allcated t the pediatric EHB dental benefit in stand-alne plans fr federally facilitated Exchanges. 31 State Exchanges may adpt the federal methdlgy fr allcating the premium tax credits t stand-alne dental plicies r a reasnable and cnsistent methdlgy determined by the Exchange. 32 Nte: There are significant implicatins fr the applicatin f the premium tax credits fr eligible lw incme families in the Califrnia Exchange, depending n state plicy chices made regarding pediatric EHB dental cverage. These impacts are imprtant cnsideratins beynd the scpe f this FAQ which shuld be cnsidered by plicymakers and may be the subject f a future Alignment Prject FAQ. 8. What federal requirements apply t the ffering f pediatric EHB dental cverage and stand-alne dental plans utside Exchanges? The ACA des nt allw fr the exclusin f the pediatric EHB dental frm cverage utside f the Exchange and issuers must ffer the full ten benefits in nn-grandfathered, nn-exchange cverage plans. 33 Outside f an Exchange, issuers must ffer and sell individuals and families cverage f all ten essential health benefits. Federal rules allw, hwever, at the issuer s ptin, in cases where an individual has purchased stand-alne dental cverage that is Exchange-certified and the issuer is reasnably assured that the individual has such cverage, the issuer t meet the EHB requirement by ffering cverage that cmbines a health plan (9.5 plan) with the pediatric EHB dental cverage (.5 plan) the individual already has purchased. 34 In this case, the stand-alne pediatric EHB dental benefit need nt be purchased in the Exchange but must be certified by the Exchange t ensure that it cvers the pediatric EHB. Althugh this questin summarizes the relevant federal law, Califrnia law prhibits ffering any cverage utside f the Exchange with less than all ten EHBs (see Questin 15). Accrding t Department f Managed Health Care (DMHC), the CMS Center fr Cnsumer Infrmatin and Insurance Oversight (CCIIO) has indicated that federal law des nt prhibit states frm requiring issuers utside f the Exchange t ffer all ten essential health benefits withut the reasnable assurance ptin described abve. 35 As discussed abve, stand-alne dental plans ffered utside f the Exchange are excepted benefits under CFR (f) CFR (e)(2). Fr further discussin and examples f hw the tax credits might be applied see the Preamble t the final rule n Benefit and Payment Parameters (Federal Register, V. 78, N.47, March 11, 2013, pp ). 33 Preamble t the Essential Health Benefits final rule (Federal Register, Vlume 78, N. 37, February 25, 2013, p ). 34 Ibid. Nte that the discussin in the Preamble f the Essential Health Benefits final rule has nt been reduced t regulatin and state regulatrs and stakehlders cntinue t seek clarificatin n its meaning and interpretatin. 35 Cnference call between the DMHC and CCIIO n June 6, 2013, as reprted by the DMHC n June 7, 2013 thrugh a backgrund set f FAQs regarding stand-alne dental plans (DMHC FAQs) prvided t legislative staff. 7

8 federal law (see questin #3 fr discussin f excepted benefits). 9. Can states require QHP issuers in the Exchange t ffer all ten essential health benefits in the Exchange? Federal law and regulatin require Exchanges t allw QHP issuers in the Exchange t ffer cverage with r withut the pediatric EHB dental, 36 at the issuer s ptin, as lng as cnsumers have a stand-alne dental ptin in the Exchange. 10. Are Exchanges required t mandate that QHPs nly ffer cverage that excludes pediatric EHB dental s that dental cverage is nly available thrugh stand-alne dental plans? N. Issuers may chse t ffer QHPs withut the pediatric EHB dental in the Exchange; Exchanges must allw QHPs with r withut pediatric EHB dental and Exchanges must allw the ffering f stand-alne dental plans cvering the pediatric EHB dental. 37 In 2012, CMS stated that Exchanges generally cannt limit the ffering f the pediatric EHB dental benefit t just ne ptin (nly embedded r nly as stand-alne). 11. Are individuals wh purchase cverage in the Exchange required by federal law t purchase a stand-alne dental plan if the QHP cverage they purchase des nt include the pediatric EHB dental? N. CMS has stated that in an Exchange, smene (with a child r withut) can purchase a QHP that des nt cver the pediatric dental EHB withut purchasing a stand-alne dental plan. 38 Prpsed rules issued in February 2013 by the Department f the Treasury, Internal Revenue Service, d nt require cverage that includes all essential health benefits in rder t qualify as minimum essential cverage. Fr example, cverage that typically des nt include all EHBs, such as grandfathered health plans, will cnstitute minimum essential cverage fr purpses f the federal cverage requirement. 39 The essential health benefits requirement in federal law (and Califrnia law) is a requirement n the issuer t include the ten EHBs in any new health plans ffered starting in 2014 t individuals and small emplyers, including cverage thrugh Exchanges. The EHB requirement is nt a requirement impsed n the purchasers f cverage r n individuals subject t the federal minimum essential cverage requirement. 12. Can states require individuals in the Exchange t purchase all ten essential health benefits, either thrugh ne embedded QHP prduct r thrugh the cmbinatin f a QHP withut dental and a stand-alne dental plan? Yes. There is nthing in federal law that wuld prhibit a state frm requiring that individuals purchase cverage fr all ten essential health benefits, including the pediatric EHB dental, in the Exchange CFR (d). 37 Ibid. 38 Preamble t the Essential Health Benefits final rule (Federal Register, Vlume 78, N. 37, February 25, 2013, p ) CFR Part 1 (Prpsed), A-0 thrugh A-5. IRS prpsed rules entitled, Shared Respnsibility Payment fr Nt Maintaining Minimum Essential Cverage. (Federal Register, V. 78, N. 22, February 1, 2013). 40 Accrding t the DMHC FAQs, in the June 6, 2013 cnference call CCIIO cnfirmed that states culd impse this requirement. 8

9 13. What plicy chices did CMS make that will apply t stand-alne dental plans ffered in federal and partnership Exchanges? Fr the 2014 cverage year, CMS will nt require QHP issuers prviding the pediatric EHB dental in the federal and partnership Exchanges t ffer and price that benefit separately frm the rest f the QHP cverage. 41 Accrding t CMS, the federal Exchange will nt have the capacity in 2014 t display dental benefits as a separate r severable benefit s that the pediatric EHB dental will have t be ffered either embedded with a QHP r in a stand-alne dental plan. CMS set the reasnable annual limit n cst sharing fr the pediatric EHB dental at r belw $700 fr a plan with ne child enrlled and $1,400 fr a plan with tw r mre enrlled children. CMS will display basic, cmparable rate infrmatin fr stand-alne dental plans n the web prtal and fr eligible individuals and families will calculate the advance payment f the premium tax credit accrding t the frmula fr federally-facilitated Exchanges utlined in regulatin. 42 T allw QHP issuers t exercise the federal statutry ptin t mit pediatric EHB dental frm QHPs in Exchanges where stand-alne dental plans will be available, CMS established a vluntary reprting prgram fr dental issuers planning t seek certificatin f stand-alne dental plans in federal and partnership Exchanges. CMS reprted that the results f the vluntary reprting mean that stand-alne dental plans will be available in every state with a federal r partnership Exchange, s QHP issuers will have the ptin (but nt the requirement) t mit cverage fr the pediatric EHB dental. Califrnia Law and Plicy 14. Hw des Califrnia law address the issue f pediatric dental as an essential health benefit? Califrnia passed state implementing legislatin in 2012 that requires all nn-grandfathered health plans sld t individuals and small emplyers, t include cverage fr all ten essential health benefits, including pediatric dental cverage. 43 Califrnia selected as the benchmark plan (base benchmark) the Kaiser Fundatin Health Plan Small Grup HMO 30 (Kaiser Benchmark). Since the Kaiser Benchmark des nt include pediatric dental cverage Califrnia chse t supplement the benchmark with the dental benefit prvided t children enrlled in the state Children s Health Insurance Prgram (CHIP) prgram, the Healthy Families Prgram in Califrnia, including medically necessary rthdntic care as required in the 2009 federal CHIP reauthrizatin. 41 CMS April 5, 2013 letter CFR (f). 43 CA Health and Safety Cde (HSC) and CA Insurance Cde (CIC) (AB 1453, Chapter 854, Statutes f 2012 and SB 951, Chapter 866, Statutes f 2012 respectively.) 9

10 15. Hw des Califrnia law impact pediatric EHB dental cverage inside and utside f the Califrnia Exchange? Califrnia s essential health benefits law applies equally t issuers inside and utside f the Califrnia Exchange. 44 Bth issuers in the Exchange and utside f the Exchange are required under Califrnia law t cver all ten essential health benefits, including pediatric dental. Califrnia s Exchange enabling law als requires that all issuers in the Exchange wh elect t als sell cverage utside f the Exchange ffer and sell all f the QHPs they ffer in the Exchange in the utside market as well. 45 Issuers nt participating in the Exchange must ffer at least ne f the standardized benefit plans adpted by the Exchange in each f the cverage tiers, if the Califrnia Exchange adpts standardized benefits (which it did) The federal requirement that Exchanges allw QHPs t ffer cverage that either includes r excludes the pediatric EHB dental, at the issuer s ptin, seems t be in cnflict with the Califrnia law requiring issuers t cver all ten essential health benefits, whether in the exchange r utside the exchange. Hw can this be reslved? Federal law des require Exchanges t allw at least sme QHPs t exclude pediatric EHB dental cverage. Given the Califrnia law requiring issuers in the individual and small emplyer markets t cver all ten EHBs in new cverage, DMHC sught federal clarificatin n these issues and determined the fllwing: 47 State Exchanges must allw QHP issuers t sell cverage withut pediatric EHB dental (9.5 plans) at the issuer s ptin. States cannt require QHP issuers in the exchange t ffer all ten essential health benefits. States can require cnsumers purchasing cverage in an Exchange t buy all ten essential health benefits, as lng as the cnsumer has a stand-alne dental plan chice. Califrnia s essential health benefits law includes language that nthing in this sectin shall be implemented in a manner that cnflicts with a requirement f the Patient Prtectin and Affrdable Care Act (PPACA) and als that the prvisins f the state EHB law shall be implemented nly t the extent essential health benefits are required pursuant t PPACA. 48 DMHC interprets these prvisins t require that as a regulatr DMHC must allw issuers seeking t be in the Exchange t ffer a plan withut pediatric dental, a 9.5 cverage plan, t cmply with federal law. Under federal law, issuers utside f an Exchange d have t ffer all ten essential health benefits, including pediatric EHB dental cverage; unless the plan btains an assurance that the individual has pediatric cverage thrugh a stand-alne dental plan. 49 Hwever, states may require issuers utside the Exchange t cver all ten essential health benefits withut the reasnable assurance exceptin. 44 CIC (f) and HSC (f). 45 CIC (c)(1)(a) and HSC (c)(1)(A). 46 CIC (e) and HSC (e). This requirement nly applies if the Exchange Bard adpts standardized benefit plans. Califrnia Exchange did adpt standardized benefit plans thrugh regulatins (10 CA Cde f Regulatins (CCR) 6426). 47 DMHC FAQs, June 7, CIC (j) and HSC (j). 49 The stand-alne dental plan must btain an Exchange certificatin t ensure that it cvers the pediatric EHB dental. 10

11 CDI and DMHC interpret the cmbined state and federal law t require issuers in Califrnia t ffer all ten benefits utside the Exchange withut the reasnable assurance exceptin. Issuers participating in the Exchange wh als ffer cverage utside the Exchange must add pediatric EHB dental cverage t Exchange QHPs when sld in the utside market in rder t cmply with bth the requirement t cver all 10 and the requirement t ffer all Exchange QHPs utside f the Exchange. In 2014, based n decisins made by the Califrnia Exchange t date, issuers in the Exchange will administer tw separate ut-f-pcket maximums (ne fr medical ($6,350) and ne fr dental ($1,000)). Accrding t CDI and DMHC, in recent discussins CMS indicated that under federal law issuers utside the Exchange wuld als be able t administer tw separate ut-f-pcket maximums but further analysis f relevant state law is pending. Bth CDI 50 and DMHC 51 recently adpted emergency regulatins implementing essential health benefits which allw qualified health plans in the Califrnia Exchange t ffer bth 9.5 and 10 benefit plans at their ptin if specified cnditins are met. 17. What plicies related t pediatric EHB dental have t date been adpted by the Califrnia Exchange? Based n review f reasnably available Califrnia Exchange Bard agendas, minutes, plan slicitatin dcuments / cmmunicatins and Bard-adpted regulatins, the fllwing Califrnia Exchange plicies were adpted r discussed regarding pediatric EHB dental cverage: Require [initially] QHP issuers t submit bids fr all ten essential health benefits, including pediatric EHB dental and visin care, and t als submit a separate bid reflecting the exclusin f the pediatric EHB dental. Pediatric visin care will be included as an embedded benefit in QHPs. 52 Allw bids frm stand-alne plans ffering pediatric EHB dental in bth the individual and Small Business Health Insurance Optins Prgram (SHOP) exchanges CCR CDI regulatins excerpt: Essential health benefits are defined t include all f the fllwing: (1) Health benefits within the ten categries f essential health benefits enumerated in subdivisin (a)(1) f sectin Prvided that a standalne pediatric dental plan is certified t be ffered n the Exchange pursuant t sectin 1302(b)(4)(F) f PPACA (42 USC 18022(b)(4)(F)), a health insurer participating in the Exchange may, but is nt required t, mit cverage f the pediatric ral essential health benefit in a health insurance plicy sld n the Exchange. A health insurance plicy sld n the Exchange shall nt mit cverage f the pediatric ral essential health benefit when sld utside f the Exchange pursuant t subdivisin (c)(1) f Insurance Cde sectin r therwise CCR DMHC regulatins excerpt: If a stand-alne dental plan described in the PPACA at sectin 1311(d)(2)(B)(ii) (42 USC (d)(2)(b)(ii)) is ffered n the Califrnia Health Benefit Exchange (Exchange), then, pursuant t the PPACA sectin 1302(b)(4)(F) (42 USC 18022(b)(4)(F)), health plan cntracts ffered in the Exchange may, but are nt required t, mit cverage f pediatric dental care benefits described in Health and Safety Cde Sectin (a)(5). A health plan shall nt mit cverage f the pediatric dental EHB fr health plan cntracts sld utside the Exchange. 52 Califrnia Exchange. Qualified Health Plan Plicies and Strategies t Imprve Care, Preventin and Affrdability: Optins and Recmmendatins. August 23, Adpted by the Califrnia Exchange Bard. 11

12 Adpt emergency regulatins establishing QHP standard benefit designs fr all ten essential health benefits (including child dental and visin care) but incrprate the federal definitin f QHP that allws a QHP t exclude pediatric EHB dental. 54 Adpt emergency regulatins establishing standard benefit designs fr pediatric EHB dental cverage 55 and require the standard dental benefits t be prvided whether embedded in a QHP r ffered in a stand-alne dental plan in bth the individual and SHOP exchanges. Adpt federal actuarial value requirements f 70% and 85% fr the pediatric dental EHB. Require guaranteed issue f pediatric EHB dental in the Exchange althugh nt required in federal law. 56 Adpt emergency regulatins 57 requiring that the Califrnia Exchange cnduct the QHP slicitatin prcess accrding t the QHP slicitatin incrprated in the regulatins, which requires QHP bidders t include pediatric dental, subject t a requirement t separate that may ccur and will be prescribed thrugh the administrative rulemaking prcess at a later date depending n future federal guidance and rules. 58 Adpt a QHP Mdel Cntract (final May 21, 2013) which requires QHPs t prvide essential health benefits cnsistent with applicable laws, including specific reference t the state essential health benefits requirements in law, but als allw fr QHPs that d nt cver pediatric EHB dental cverage Adpt emergency regulatins incrprating the slicitatin fr stand-alne pediatric dental plans and establishing the bid requirements and selectin criteria. 60 In additin t the regulatins and plicy decisins described abve, the Califrnia Exchange has prvided the fllwing relevant infrmatin and cmmunicatins regarding pediatric EHB dental: Cnfidential cmmunicatin t QHP bidders revising the QHP slicitatin requirements relating t pediatric EHB dental as fllws: (1) Every QHP must bid the pediatric EHB dental benefit as a bundled ptin thrugh partnering with a stand-alne pediatric dental plan; (2) Embedded pediatric EHB dental is prhibited; (3) QHPs will be required t generate a single invice fr the bundled prduct; (4) Federal rules require ne ut-f-pcket maximum fr QHPs with embedded dental but allw a separate annual maximum if the benefit is prvided thrugh stand-alne dental plans (including bundled); (5)The revised apprach [in the letter t bidders] permits separate annual utf-pcket maximums fr medical and dental; and (6) The separate ut-f-pcket maximum fr stand-alne pediatric EHB dental in the Califrnia Exchange will be $1,000 in Ibid. Staff presentatins t the Bard at the September 2012 and Octber 2012 meetings relating t the qualified health plan slicitatin cntent and timeline reaffirmed these plicies CCR CCR Califrnia Exchange. Slicitatin HBEX 15: Vendr Inquiry Respnses (v1.0), Questin D102. February 1, CCR 6410, 6420, 6422, 6424, 6440, 6442, and Adpted as emergency regulatins 1/17/13 and readpted by the Bard 6/25/ Califrnia Exchange Initial Qualified Health Plan Slicitatin t Health Issuers. Final December 28, Califrnia Exchange. Final Qualified Health Plan Mdel Cntract. May 21, CCR Califrnia Exchange. Rules fr QHP bidders fr Submissin f Pediatric Dental Essential Health Benefit Dental Plans in cnjunctin with Qualified Health Plans which prvide all essential health benefits ther than the Pediatric Dental EHB. April 12

13 Supplemental visin and dental plans (ther than pediatric EHB dental cverage) will nt be ffered in 2014 and further analysis is required t determine hw such benefits might be ffered thrugh the Califrnia Healthcare Eligibility, Enrllment and Retentin System (CalHEERS) in the future. 62 Califrnia Exchange staff presented the fllwing at the June 20, 2013 Bard regarding pediatric EHB dental: (1) Adpted standard dental plan designs allw fr separate ut-f-pcket maximum fr pediatric EHB dental ($1,000); (2) The purchase f pediatric dental fr 2014 is vluntary and any stand-alne dental plan can be purchased with any QHP; (3) Every QHP is required t partner with a stand-alne pediatric dental plan using a bundled apprach; and (5) Selectin f pediatric dental plan bidders will be annunced June 25, Califrnia Exchange annunced the selectin f six pediatric EHB dental plans ffering three different prduct types (HMO, PPO and EPO plans) with rates ranging frm $9 per mnth t $44 per mnth, depending n the benefit plan design, the issuer and the gegraphic rating regin. 63 The Exchange ntice f the selected children s dental plans stated that the purchase f the children s dental health insurance plan is nt required. All f the annunced dental plan fferings are standalne dental plans and n embedded ffering f all ten essential health benefits was selected What is the status f the pediatric EHB dental in the Califrnia Exchange? What are sme f the issues and plicy questins fr plicymakers and the Exchange Bard related t the ffering f this benefit in the Califrnia Exchange? As f this writing, all f the QHP fferings in the Califrnia Exchange exclude pediatric EHB dental (n embedded fferings), the pediatric EHB dental will nly be available in stand-alne dental plan fferings, and purchase f the pediatric EHB dental benefit is vluntary fr individuals enrlling in the Exchange. The Exchange Bard has scheduled a special Bard meeting fr August 8, 2013 which will include a fcus n and discussin f the pediatric EHB dental benefit. Stakehlders and plicymakers have raised questins and cncerns n the prpsed structure and design f this benefit ffering in the Exchange, including, fr example, cncerns that all children may nt end up with the cverage and that getting the cverage may be an affrdability challenge fr families since the premium in the ffered pediatric EHB dental plans is higher than the premium likely wuld have been fr cverage embedded in a QHP purchased by all individuals in the Exchange. The questins abve highlight the cmplex array f state and federal laws that apply t this plicy chice. Any recnsideratin r changes made t hw the Califrnia Exchange ffers the pediatric dental EHB need t be made in that cntext, but it may be helpful t evaluate ptins and next steps in three categries: 3, (This cmmunicatin was btained in hard cpy and was referenced in the June 4, 2013 Assembly Health Cmmittee analysis f AB 18 (Pan) but at the time f this analysis a reasnable search f the Califrnia Exchange web site did nt yield an electrnic versin psted n the site.) 62 Califrnia Exchange. Ntice t Supplemental Dental and Visin Bidders: Supplemental Benefits. February 26, Staff presentatin at April 23, 2013 Bard meeting. 63 Califrnia Exchange. Children s Dental Insurance Plan Rates, June 25, The Health Net dental cverage ffering is bundled with Health Net medical cverage but will nt be available as a standalne dental plan with ther QHPs in the Exchange. 13

14 Structure f Benefit Offering. As described abve, Exchanges have three ptins fr prviding cverage fr the pediatric EHB dental embedded with a QHP, r thrugh a stand-alne dental plan bundled with a QHP r a stand-alne independent f any QHP in sme cmbinatin that ensures that cnsumers have a stand-alne dental ptin. On the structure questin, decisin makers will necessarily need t cnsider and assess: The impact n premium and cverage (expected take-up) fr pediatric EHB dental with the current structure and the ptential impacts f making changes t the fferings, which culd include allwing issuers that want t resubmit QHPs with embedded pediatric EHB dental t d s. The advisability and feasibility f cnducting a timely re-bidding r revisin t the QHP and/r stand-alne dental fferings in the Exchange fr 2014, including the peratinal and CalHEERS impacts affecting the scheduled Octber 1, 2013 pen enrllment date. Whether there wuld be adequate time fr regulatry review and apprval by CDI and DMHC f any new/revised prduct fferings and rates. Purchase f Pediatric EHB Dental. The current plicy f the Califrnia Exchange wuld make purchase f the pediatric EHB dental benefit vluntary. The purchase rules affect the pricing f the benefit ffering and the anticipated number f children wh are likely t end up with dental cverage. On the purchase questin, decisin makers will need t cnsider and assess: Whether the purchase f pediatric EHB dental shuld be vluntary r mandatry and what state and federal laws and authrity need t be cnsidered t implement either chice. If mandatry, wh shuld be required t purchase the benefit, all purchasers in the Exchange, r nly families with children under age 19? Affrdability f the dental EHB cverage depending n hw it is ffered and wh is required t purchase it. Fr example, leaving the purchase vluntary wuld likely lead t adverse selectin, and ptentially higher premiums, if families with children wh may have high dental needs disprprtinately chse the benefit. At the same time, limiting a purchase requirement t families with children, rather than embedding the cverage in QHPs purchased by all individuals buying Exchange cverage, als ptentially increases the premiums fr families with children. What is the impact n verall affrdability fr families frm the different ut-f-pcket maximums fr embedded cverage and stand-alne cverage? Impacts related t the level f premium tax credits that will be available fr lw-incme families in Califrnia as a result f the structure f the dental ffering? Assessment f these and ther impacts culd be accmplished thrugh develpment f specific examples and scenaris fr individuals and families in different circumstances making different cverage chices. What assistance will be available fr families purchasing pediatric EHB dental? Federal rules allw fr sme allcatin f premium tax credits t dental plans as determined by the Exchange but it wuld be helpful t understand hw that might wrk n a practical level fr families in Califrnia fr each f the structure and purchase requirements under cnsideratin. The premium assumptins incrprated by bidding QHPs and dental plans regarding wh wuld be buying pediatric EHB cverage and hw thse assumptins (and the resulting 14

15 premium rates) wuld change if plicies in the Exchange are changed. Evaluatin. Whatever the final structure and requirements applicable t pediatric EHB dental in the Califrnia Exchange in 2014, plicymakers and the Exchange Bard shuld develp clear prcesses fr tracking and evaluating the take-up rates and experience with pediatric EHB dental t infrm future state decisins n this issue. Fr 2015, plicymakers, including the Exchange Bard, may wish t engage stakehlders early in 2014 in analysis and public discussin f the mst effective appraches t ffering pediatric EHB dental cverage in the Exchange s as t bth maximize the numbers f children cvered and ensure the affrdability f the cverage. Future discussin f the plicy ptins and implicatins shuld include a thrugh public vetting f thse ptins in advance f the QHP slicitatin and re-certificatin prcess fr the 2015 cverage year. The Health Insurance Alignment Prject is a prject f The Kelch Plicy Grup Supprted by a Grant frm the Califrnia HealthCare Fundatin Cntact: Debrah Kelch dk@kelchplicy.cm (916) alignmentprject.rg 15