Additional Guidance from HHS on Third-Party Payment of Premiums and Cost Sharing of Marketplace Qualified Health Plan Enrollees

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On May 21, 2014, the Secretary of Health and Human Services (“HHS”), Kathleen Sebelius, published a letter to the American Hospital Association (“AHA”) (“HHS Letter”) in response to the AHA’s questions about qualified health plan (QHP) issuers accepting premium and cost-sharing payments from third-party payors.

This HHS Letter is an additional level of clarification in a series of various guidance documents issued by CMS in the past year on this subject matter.  Such past guidance includes:
  • an October 2013 letter to Representative Jim McDermott stating that QHPs that are offered through the Federally-facilitated Marketplaces (FFMs) are not considered “federal health care programs;”
  • a November 4, 2013 Frequently Asked Questions document expressing concern regarding hospitals, other health care providers, and other commercial entities payment of premiums and cost-sharing obligations on behalf of QHP enrollees in Marketplaces;
  • February 7, 2014  guidance clarifying the November 4th FAQ does not apply to payments for premiums and cost sharing made on behalf of QHP enrollees by Indian tribes, tribal organizations, urban Indian organizations, and state and federal government programs or grantees, and private, not-for-profit foundations, in certain circumstances; and
  • a March 19, 2014 interim final rule requiring issuers of QHPs to accept premium and cost-sharing payments made on behalf of enrollees by the Ryan White HIV/AIDS Program, other federal and state government programs that provide premium and cost sharing support for specific individuals, and Indian tribes, tribal organizations, and urban Indian organizations.

The HHS Letter states that third-party payments of premiums and cost sharing made on behalf of Marketplace QHP enrollees by private, not-for-profit foundations are not prohibited to the extent the payments are made in a manner consistent with the February 7, 2014 guidance.  The February 7, 2014 guidance allows payment to be made by private, not-for-profit foundations on behalf of QHP enrollees, if the QHP enrollees satisfy defined criteria based on financial status, and do not consider enrollees’ health status.  In addition, CMS expects that premium and cost-sharing payments cover the entire policy year.   In the HHS Letter, HHS then declined to issue any additional guidance in the area at that time.
For questions on this HHS Letter and previous guidance please contact Meghan McNab at