HHS releases final ruling on health insurance exchanges

The US Government Department of Health and Human Services (HHS) issued its final ruling on health insurance exchanges last month. The final rule combines two earlier rules - Affordable Insurance Exchanges & Qualified Health Plans (QHPs) - that had been released in July and August 2011 respectively.

The final regulation provides an outline on how health insurance exchanges are expected to operate, criteria for defining a plan as a Qualified Health Plan (QHP) and standards for determining eligibility of individuals to participate in plans and employers to participate in SHOP exchanges.

States have been granted additional flexibility to decide if they want a nonprofit organization or a public agency to operate their state health insurance exchanges. States can select plans to participate in the exchange and have been granted the option to partner with HHS for some key functionalities or support functions. The rule also allows added flexibility in determining exchange participation eligibility for various candidates. Employers may find it easier to get coverage through a health insurance exchange.

Establishment of Exchanges
Each state has an option to design its exchange as it deems appropriate. The state health insurance exchange can be - a nonprofit unit set up by a state agency, an autonomous public unit or as an extension of some state agency. States also have an option to set up a regional exchange in partnership with other states or set up multiple exchanges across the state that caters to defined areas within the state. Exchanges that are run by nonprofit or autonomous agencies need to promote ethical and transparent financial notification standards and should not allow parties with conflicting interest to run exchanges.

Qualified Health Plans
Health plans participating in the exchange should provide high quality benefit coverage as is provided in an employer plan. All plans need to meet the criteria as defined under the ACA mandates. States have been granted power to issue additional qualifying standards for health plans to participate in the state health insurance exchanges.

Eligibility determination
The final state health insurance exchange directive requires states to establish a web based system that simplifies and standardizes the way individuals determine their eligibility for exchange, health plans and federal subsidies. Irrespective of the mode of application submission or the system structure that receives the application, individuals would be provided the same application to determine their eligibility without the need to submit data to multiple programs.

Enrollment
Once an individual is declared eligible to purchase insurance from exchange, exchange portal need to be so designed that it facilitates consumer’s enrollment for a plan through the help of navigators, toll-free call centers, live web chats etc. Exchanges has to be designed to minimize risk of fraud or data theft and need to ensure secure and private data handling.

SHOP exchanges
SHOP exchanges were proposed to facilitate the way employers purchased coverage for their workforce. As per the final rule, SHOP exchanges need to provide employers an option to choose the level of health coverage to provide and employees with added flexibility to select a plan that best meets their needs. Employers can also opt for coverage from different insurers but need to be issued a common bill and write a common check.

These are some of the added flexibilities that the HHS has allowed states in designing their exchanges.