On Nov. 29, HHS released 13 Q&As addressing implementation issues for state and federally facilitated Exchanges. The Q&As cover a range of topics including funding responsibility and resources, information exchanges through federally managed data “hubs,” and shared eligibility verification services. Among them are Q&As focused on issues raised by federally facilitated Exchanges, highlighted below.
1)One Q&A addresses the coordination of federally facilitated Exchanges and state insurance departments. The Q&A explains that HHS intends to work with states to preserve the traditional responsibilities of state insurance departments (e.g., licensure, solvency, and network adequacy standards) when establishing a federally facilitated Exchange.
2)A second Q&A raises issues regarding eligibility determinations made by state versus federally facilitated Exchanges. It concludes that the proposed Exchange rules currently do not distinguish between a state-established Exchange and a federally facilitated Exchange, but based on comments it has received, HHS intends to modify the rules to permit additional options that take into account the different data available to each.
3)Another Q&A asks whether individuals who are enrolled in coverage through a federally facilitated Exchange will have access to premium tax credits, as well as the advance payments of tax credits that will be authorized by Exchanges. Responding that IRS and HHS regulations are clear on this point and supported by the statute, the Q&A asserts that individuals enrolled in coverage through either a state-established Exchange or a federally facilitated Exchange may be eligible for tax credits, including advance payments.
By way of background, HHS is required to determine by Jan. 1, 2013 whether each state’s Exchange will be fully operational by Jan. 1, 2014. In states that don’t obtain HHS approval by Jan. 1, 2013, or in states that decide not to establish an Exchange, a federally facilitated Exchange would be implemented by HHS for 2014.
One detail that is drawing attention is whether the premium tax credit will be available to individuals enrolled through a federally facilitated Exchange. Health care reform requires that if a state doesn’t meet the deadline for establishing an Exchange (or chooses not to establish one), HHS shall “establish and operate such Exchange.” So, the question becomes, does such a federally facilitated Exchange trigger eligibility for credits that, by statute, may be available to certain individuals enrolled in Exchanges “established by the state”? Proposed regulations and this guidance suggest it does, but one Senator has written a letter to the Treasury Secretary taking the opposite view.
The full text of the Q&A can be found at:
http://cciio.cms.gov/resources/files/Files2/11282011/exchange_q_and_a.pdf.pdf
