State Exchange Regulations Issued


On March 12, the federal Department of Health and Human Services (HHS) released a revised version of the federal rules regarding the “Establishment of Exchanges and Qualified Health Plans and Exchange Standards for Employers.” Parts of the 644-page regulation have been issued as a final rule, meaning that they will have the full force of law within 60 days of the regulation’s publication in the Federal Register on March 13.

Other sections, including section 155.220(a)(3), which addressed the ability of a state to permit agents and brokers to assist qualified individuals in applying for exchange-based premium subsidies and cost-sharing reductions, have been issued as an interim final rule, meaning that they may be changed at a later date and are still open for public comment within 45 days.

The newly released rule takes two of the proposed exchange rules that were issued during the summer of 2011 and combines them into one final and interim final rule.  The new document covers both the establishment of exchanges by the states, as well as eligibility standards for employers.

Still to be released are final rules that address:
•    risk-spreading mechanisms,
•    how Medicaid eligibility will be determined in the exchanges
•    how premium subsidy tax credits will work
•    exemptions from the individual mandate
•    essential benefits
•    quality standards
•    how federal exchanges that HHS will be required to set up in states that don’t create their own will work
•    how  “partnership” exchanges where HHS and the states will split exchange management functions will work.

Some of the areas the rules do cover include:
•    standards for exchange navigator programs
•    requirements about the awarding of navigator grants
•    navigator training requirements and conflict of interest standards
•    clarification of the role of agents and brokers in state exchanges outside of the navigator program
•    HHS’ decision to not create detailed federal marketing oversight requirements for state exchanges, as was suggested might be a possibility in the original proposed rule.

The final rule also notes that many individuals and entities that submitted comments on the proposed exchange rules suggested that HHS set standards for agent and broker compensation in the exchanges, and that HHS opted not to do so.  In addition, Tim Hill, the deputy director in the Centers for Medicare and Medicaid Services insurance-regulation office, explained to reporters, “… the federal government would not regulate how insurance brokers (or other companies that crop up to guide consumers onto the exchanges) charge and collect fees.”

The full text of the rule is available at:

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