Affordable Insurance Exchanges

On July 11, 2011, the U.S. Department of Health and Human Services (HHS) published two Notices of Proposed Rulemaking (NPRM). The first proposed rule, the Exchange NPRM, outlines a framework that will enable States to build Affordable Insurance Exchanges, new State-based competitive marketplaces created under the Affordable Care Act. The second NPRM, addresses standards related to reinsurance, risk corridors, and risk adjustment to assure stability in these newly established markets. These proposed rules are a major step forward in implementing the Exchanges.

Starting in 2014, individuals and small businesses will have the same affordable insurance choices as Members of Congress and will be able to purchase private health insurance through the Exchanges. Exchanges will make it easy for individual consumers and small businesses to compare health plans, get answers to questions, and enroll in or offer to their employees a health insurance plan that meets their needs. Individuals will be able to find out if they are eligible for advance payments of premium tax credits and cost sharing reductions or health programs like the Children’s Health Insurance Program (CHIP); small businesses will be eligible for a tax credit for coverage purchased for employees through the Exchange.

The main topics of the proposed Exchange NPRM include standards for: 

• States that elect to establish and operate an Exchange;
• Health insurance plans to participate in an Exchange;
• Enrollment in health plans through Exchanges; and
• Employers who opt to participate in the Small Business Health Options Program (SHOP). 

HHS is accepting public comment on the proposed rules over the next 75 days to learn from States, consumers, and other stakeholders how the rules can be improved. HHS will modify these proposals based on feedback from the American people. To facilitate that public comment process, HHS will convene a series of regional listening sessions and meetings.

Small Business Health Options Program (SHOP)

Beginning in 2014, Exchanges will operate a Small Business Health Options Program (SHOP), a program that offers small employers and their employees new choices. Through the SHOP, employers can choose the level of coverage they will offer (bronze, silver, gold or platinum plans), define their contribution toward their employees’ coverage, and then offer the employees choices of multiple insurers and plans. Employees choose among the plans that fit their needs and their budget. Employers can offer coverage from multiple insurers, just like larger companies and government employee plans, but get a single bill and write a single check.States and their Exchanges will shape how SHOP is structured. 

• Size of small businesses that can participate in SHOP: States can set the size of the small group market up to 50 employees instead of 100 employees until 2016. And, starting in 2017, States may let businesses with more than 100 employees buy large group coverage through the SHOP.

Starting in 2014, small employers purchasing coverage through SHOP may be eligible for a tax credit of up to 50% of their premium payments if they have 25 or fewer employees, pay employees an average annual wage of less than $50,000, offer all full time employees coverage, and pay at least 50% of their premium. Employees offered affordable and minimum value health insurance by their employer are not eligible for advance payments of tax credits to reduce premiums for coverage purchased through the individual Exchange.

For additional information please visit www.HealthCare.gov. 

Source: www.HealthCare.gov