Insurer Cites Concerns With Specific Benefit Coverage Requirement

Thank you for the opportunity to provide comments on the supplemental notice of proposed rulemaking (SNPRM) on Minimum Value of Eligible Employer-Sponsored Health Plans.

Cigna Corporation, together with its subsidiaries {either individually or collectively referred to as "Cigna"), is a global health services organization dedicated to helping people improve their health, well-being and sense of security. Our subsidiaries are major providers of medical, dental, disability, life and accident insurance and related products and services. Worldwide, we offer peace of mind and a sense of security to our customers seeking protection for themselves and their families at critical points in their lives. We have developed a unique approach to health care coverage for beneficiaries and have a deep understanding of the needs and challenges facing both patients and physicians.

Our previous comments on Affordable Care Act (ACA) regulations and guidance reflect our commitment to expanding access to quality, affordable health care options for all individuals. As a leading provider of health insurance services, Cigna has a keen interest in continuing to shape implementation of the ACA. We are committed to the customers we serve and we offer the comments below to meet a goal we share with you: to improve access and affordability of health insurance coverage for all. The SNPRM on Minimum Value of Eligible Employer-Sponsored Health Plans and the rules implementing the ACA will have a significant impact on Cigna and the clients and customers we serve. We therefore appreciate the Department's willingness to receive comments on this very important subject.

We reviewed the SNPRM on Minimum Value of Eligible Employer-Sponsored Health Plans and have concerns about its implications. Currently, under section 36B(c)(2)(C)(ii) of the Internal Revenue Code (IRC), an eligible employer-sponsored plan is considered to provide minimum value if the plan's share of total allowed costs of covered benefits is at least 60 percent. The Department is now proposing to add ". . . substantial coverage of inpatient hospitalization and physician services" to what an employer must offer to meet the minimum value standard.

Employers are sensitive to their employees' needs and recognize the value of offering health insurance in a competitive labor market. In order for employer-sponsored health coverage to be meaningful and beneficial to employees, employers require flexibility to design benefits based on the needs of their specific workforce. The ACA recognized the importance of maintaining the flexibility employers, particularly large employers, need and enjoy. The approach of establishing a "minimum value" struck a good balance between flexibility in benefit design on one hand and holding employers accountable for offering meaningful coverage to their employees on the other. The standard of a plan paying 60 percent of total allowed costs of covered benefits represents a measured approach that works for employers and employees.

Imposing requirements related to coverage of specific benefits limits employers' ability to design benefits that best meet the needs of their employees. It also forces difficult decisions about tradeoffs in coverage of other benefits. Furthermore, as can be seen in the plans on the Individual and SHOP Marketplaces, there can be substantial differences in the price of specific plan designs even though they have similar actuarial values.

Smaller employers, particularly those with 50-100 full-time employees, could be adversely affected if the requirements for specific benefit coverage cause a significant increase in the price of the policies, even if it is possible to continue to create plans that are valued at the 60 percent level. We note that, without knowing what "substantial coverage" means, it is impossible to know if plans with a 60 percent value will continue to be a reality. We recommend that any specific benefit coverage requirement should not prevent an employer from designing a plan to meet the 60 percent threshold. In addition to the direct affordability issue for the employer, coverage requirements raise concerns around triggering mandate penalties if coverage becomes unaffordable for employees and future susceptibility to the so-called "Cadillac tax" under section 4980I of the IRC.

In a more technical vein, it is unclear what the Department means by "substantial coverage" or "physician services." If the Department pursues its proposal, those concepts would need to be clearly defined. Additionally, should the Department decide to pursue the "inpatient hospitalization" portion of the proposal, we caution against requirements for types of care based on location -- inpatient or outpatient -- as the setting of care should be decided by the treating medical professional and not dictated by the plan. Furthermore, the Department should be wary of the confusion and difficulty this intrusion by government regulation would create. Plans already have to comply with varying state definitions of physicians and services, so we have concerns about how the Department's proposal would add to an already complex situation.

Employers should continue to have the flexibility to offer a plan that is attractive and affordable for their employees and meets the 60 percent threshold. Imposing new coverage requirements threatens the delicate balance struck in the ACA and puts at risk the employer-sponsored coverage that protects more than 150 million Americans today.

Thank you for your consideration of our comments.