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HHS Releases First Set of Exchange Regulations

Today, HHS released the first set of proposed regulations for state-based health insurance Exchanges. This notice of proposed rulemaking (NPRM):

  • Sets forth the federal requirements that states must meet if they elect to establish and operate an Exchange;
  • Outlines minimum requirements that health insurance issuers must meet to participate in an Exchange and offer qualified health plans (QHPs); and
  • Provides basic standards that employers must meet to participate in the Small Business Health Options Program (SHOP).

The NPRM states that the Secretary can determine by January 1, 2013 whether a state’s Exchange will be fully operational (capable of beginning operations by October 1, 2013 to support initial enrollment period) by January 1, 2014. However, it allows states great flexibility in the timing and governance of their Exchanges. After January 1, 2014, states may transition from a federally-run Exchange to a state-run Exchange (state’s plan must be approved 12 months in advance) OR states may transition from a state-run Exchange to a federally-run Exchange (must give 12 months notice).

Although ACA established general legislation surrounding the establishment of Exchanges, it allowed several issues to be addressed in separate rulemaking, including:

  • Standards for individual eligibility for participation in the Exchange, advance payments of the premium tax credit, cost-sharing reductions, and related health programs and appeals of eligibility determinations;
  • Standards outlining the Exchange process for issuing certificates of exemption from the individual responsibility requirement and payment;
  • Defining essential health benefits, actuarial value and other benefit design standards; and
  • Standards for Exchanges and QHP issuers related to quality.

HHS is seeking public comment over the next 75 days.