Last week, CMS issued a final rule which aims to relax certain Affordable Care Act (ACA) health plan regulations, found at 45 C.F.R. Parts 147, 153, 154, 155, 157, and 158, while increasing marketplace competition. In furtherance of this agenda, CMS claims the final rule redistributes control over insurance standards from the Federal government to State governments and provides States and insurers with tools to lower premiums.

For example, HHS will allow States to further determine what benefits are offered as part of available insurance plans. As explained in a CMS press release addressing the new rule, the final rule will eliminate the requirement that insurers offer a standardized set of plan benefits. Instead of standardized benefits, States can either select from any of the 50 benchmark plans previously selected by other States in 2017 or use a piecemeal approach. Further, the final rule increases the threshold for reviewing premium rate increases. Under this change, the rate increase threshold that triggers a review by State regulators for 2019 is one of at least 15 percent. Prior to the final rule, insurers that planned to increase rates by 10 percent were required to submit their rates to regulators for review.

Finally, CMS added two retroactive exemptions to the individual mandate, which requires all Americans to have health insurance coverage. Under one of the exemptions, individuals who live in a county with no insurers, one insurer, or if the only insurance plans available cover abortions, would not have to pay the penalty for lacking insurance. Currently, three States – California, Oregon, and New York – require all State-regulated private health insurance policies to include coverage for abortion services.

The final rule becomes effective for ACA health plans sold this fall for 2019 coverage.