HHS Issues Final and Interim Regulations Implementing American Health Benefit Exchanges under the Patient Protection and Affordable Care Act
On March 12, 2012, the Department of Health and Human Services (“HHS”) issued final and interim rules governing the establishment and operation of American Health Benefit Exchanges under the Patient Protection and Affordable Care Act (“PPACA”). The PPACA requires states to establish Exchanges that will provide a competitive marketplace for individuals and small businesses to directly compare available health insurance options. The Exchanges, which will become operational by January 1, 2014, are intended to increase competition in the health insurance marketplace, improve affordable health coverage choices, and give small businesses the same purchasing clout as large businesses. The new rules set forth the minimum federal standards that states must meet if they elect to establish and operate an Exchange (if a state fails to establish its own Exchange, the federal government will create one for it); outline the minimum standards that health insurers must meet to offer Qualified Health Plans (“QHPs”) on an Exchange; set forth uniform standards to be used in determining an individual’s eligibility to enroll in an Exchange and to participate in affordability programs; and provide basic standards that employers must meet to participate in the Small Business Health Options Program (“SHOP”).
Beginning in 2014, employers with 100 or less employees will be eligible to purchase coverage through SHOP Exchanges, which will provide an array of affordable, high quality insurance plans for small employers. Beginning in 2017, businesses with more than 100 employees will also be eligible to purchase coverage through SHOP Exchanges. Notably, the interim-final rule indicates that multiemployer plans that meet certain requirements will be considered SHOP plans. This means that employers contributing to multiemployer plans will avoid the PPACA’s employer responsibility penalties and that lower-income participants will be eligible for cost-sharing subsidies. In addition, the final rule also indicates that insured multiemployer plans will be considered “aggregators of premium contributions and arrangers of coverage” through the SHOPs for plan participants. This will allow insured multiemployer plans to reap the cost-saving benefits of participating in a SHOP, while also maintaining the group for purposes of providing benefits in addition to those offered on the Exchange (HRAs, WRAs, life insurance, etc.). HHS has indicated that detailed guidance regarding the interaction of multiemployer plans (both insured and self-insured) and the Exchanges will be issued in the future.