Guidance

3/12/12 HHS announced the final "Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers" rule. The rule combines policies from two proposed rules published during the summer of 2011, providing guidance and options to states on how to establish and structure their health insurance exchanges, providing standards to qualify health plans for participation and determine the eligibility of both individuals and small business that want to use exchanges to provide health coverage to their employees, including premium tax credits. HHS also announced that certain eligibility and enrollment requirements provisions of the final rule are being issued as an interim final rule and are open to public comments which are due May 11, 2012.

As required under §1311, §1312 and §1321 of the ACA, the final rule offers a framework to assist states in setting up Affordable Insurance Exchanges. Operational by January 1, 2014, exchanges will provide competitive marketplaces for individuals and small employers to directly compare available private health insurance options. Under the final rule, HHS will offer conditional approval to state plans if the states have made progress by January 2013, but aren't ready to submit their final exchange plans. The final rule allows states to decide whether their Exchange should be operated by a non-profit organization or a public agency, how to select plans to participate, and whether to partner with HHS for some key functions. According to the final rule, exchanges will perform a variety of functions, including: Certifying health plans as qualified health plans (QHPs, plans certified by Exchanges to meet minimum standards) to be offered in the Exchange; operating a website to facilitate comparisons among QHPs for consumers; operating a toll-free hotline for consumer support, providing grant funding to entities called "Navigators" for consumer assistance, and conducting outreach and education to consumers regarding Exchanges; determining eligibility of consumers for enrollment in QHPs and for insurance affordability programs (premium tax credits, Medicaid, CHIP and the Basic Health Plan); and facilitating enrollment of consumers in QHPs. The final rule gives Exchanges the flexibility to establish standards for QHPs offered in a state's Exchange, such as the number and type of health plan choices offered in the Exchange, which could allow any health plan meeting the standards to participate or could create a competitive process for health plans to participate in the Exchange.

The final rule also offers flexibility regarding the eligibility determination process as authorized under ACA §1411 and §1413 establishing a streamlined, coordinated, and web-based system (which maximizes automated electronic data matching when possible) through which an individual may apply for and receive a determination of eligibility for enrollment in a QHP through the Exchange. The regulation also says that exchanges can conduct eligibility determinations for Medicaid or make a preliminary eligibility assessment and turn it over to the state Medicaid agency for final determinationand also outlines options for determining eligibility for the advanced premium tax credits.

The final rule also provides standards for Exchanges to build partnerships with and award grants to entities known as "Navigators" who will reach out to employers and employees, consumers, and self-employed individuals to conduct public education activities to raise awareness about QHPs and assist consumers in selecting QHPs. The final rule directs states to award grants to at least two Navigator organizations, one of which must be a community or consumer-focused non-profit organization.

Beginning in 2014, Exchanges will operate a Small Business Health Options Program (SHOP) authorized under ACA §1311 which will provide small employers with new ways to offer employee health coverage and access to tax credits that make coverage more affordable. Under the final rule, states will make the final decisions about what size of businesses can participate in SHOP and what health plan choices they can offer their employees.

HHS said that an additional rule on reinsurance, risk corridors and risk adjustment for plans sold in exchanges, as well as a Treasury Department regulation relating to premium tax credits and a Medicaid eligibility expansion regulation will all be published as separate final rules. HHS will also issue further guidance on the federally facilitated exchange.

Read the final rule and the interim final rule (which were published in the Federal Register on March 27, 2012) at: http://www.gpo.gov/fdsys/pkg/FR-2012-03-27/pdf/2012-6125.pdf

Read the fact sheet at:

http://www.healthcare.gov/news/factsheets/2011/07/exchanges07112011a.html

Read the press release at:

http://www.hhs.gov/news/press/2012pres/03/20120312a.html

Prior guidance can be viewed at www.healthcare.gov