Health Insurance Exchanges: A JD Supra Legal Reader

One of the key components of the Patient Protection and Affordable Care Act is the establishment of health insurance exchanges in each state, intended to function as one-stop-shopping marketplaces where individuals and small businesses can select from affordable health care options.

To participate, insurers must offer qualified health plans that meet minimum standards of coverage as well as any additional requirements set by the states.

For your reference, here’s a roundup of recent legal news and commentary on the topic:

On the Establishment of Insurance Exchanges…

CMS Issues Final Rule on Implementing Affordable Insurance Exchanges (King & Spalding)

“… CMS issued a final rule that provides a framework to assist states in establishing Affordable Health Insurance Exchanges (Exchanges) — a crucial element to the implementation of health reform under the Patient Protection and Affordable Care Act (ACA)…. According to CMS, Exchanges, which will be operational starting in 2014, are ‘one-stop marketplaces’ that will enable consumers and small businesses to select quality, affordable private health insurance plans that fit their health needs.” Read the update>>

MLA’s Weekly Health Care Wrap-Up — May 18, 2012 (McKenna Long & Aldridge LLP)

“… the Department of Health and Human Services (HHS) released additional guidance on the federally-facilitated exchange (FFE) as well as possible state partnership models. Of note, states wishing to set up their own exchange or pursue a partnership with the FFE will need to submit their ‘blueprint’ by November 16, 2012, a date that is approaching rapidly. In conjunction with the guidance, HHS also announced more than $181 million in Exchange Establishment Grants for six states – Illinois, Nevada, Oregon, South Dakota, Tennessee and Washington.” Read the update>>

Benefit News of Note For Human Resources and Finance Departments (Poyner Spruill LLP)

“Some of the nation’s largest consulting firms (Aon Hewitt and Mercer), as well as other companies in the insurance business, are rolling out private health insurance exchanges for employers. With a private health insurance exchange, a company provides its employees with a lump sum and then lets the employees choose from an array of insurance products that can be offered by more than one insurance company.” Read the update>>

On IRS Guidance Regarding Employer Requirements…

IRS Requests Comments on Minimum Value and Reporting Requirements (McDermott Will & Emery)

“Under the U.S. Patient Protection and Affordable Care Act, beginning in 2014, certain low-income individuals will be eligible to receive a premium tax credit that can be used to purchase health coverage through a health insurance exchange. The credit will not be available to individuals who are eligible for affordable coverage under an employer group health plan that provides ‘minimum value.’ Employers that do not offer affordable minimum value coverage will be assessed a penalty if any full-time employee receives the premium tax credit through an exchange.” Read the update>>

IRS Notices Address Significant Issues under the Affordable Care Act (Ballard Spahr LLP

“This requirement has fostered considerable debate about the meaning of ‘total allowed costs,’ with some employer groups advocating a strict reading of the statute that would base these costs on the coverage actually provided under the applicable employer plan and not require a plan to provide ‘essential health benefits,’ as that term is defined in the ACA and subsequent guidance. In addressing approaches that employers might follow to determine whether their plans provide minimum value, Notice 2012-31 offers employers what appears to be constrained freedom with respect to plan design.” Read the update>>

IRS Asks for Comments on Employer Reporting of Health Insurance Coverage Under Affordable Care Act (Mintz Levin)

“Effective for years beginning after December 31, 2013, Code § 4980H requires every applicable large employer (i.e., employers with 50 or more full-time equivalent employees) to satisfy the Act’s ‘employer shared responsibility’ requirements. While the Act does not require employers to offer or pay for coverage, it does furnish certain incentives to do so. Employers that offer coverage will generally pay less in the way of ‘assessable payments.’” Read the update>>

On the Status of State Exchanges…

New Jersey Governor Vetoes Health Insurance Exchange Bill (Saul Ewing LLP)

“Governor Chris Christie vetoed legislation on May 10, 2012 that would have mandated the formation and development of a ‘health insurance exchange’ in the state, as contemplated under the federal Patient Protection and Affordable Care Act (the ‘Act’)… The Governor’s veto cited uncertainty surrounding ‘the jurisdictional mandate to establish an exchange,’ as well as ‘the individual mandate to procure health insurance,’ arising from the pending constitutional challenge to the Act in the Supreme Court of the United States.” Read the update>>

State of the States: Health Insurance Exchanges — May 11, 2012 (McKenna Long & Aldridge LLP)

“In Illinois, lawmakers announced that they were tabling a bill to create an exchange until after the Supreme Court’s decision… Then in Alabama, exchange legislation that had passed the House is now running out of steam in the Senate in the face of a looming veto threat from Governor Robert Bentley (R) and over concerns that the proposed legislation would primarily benefit Blue Cross Blue Shield of Alabama… In Connecticut, a bill that would have increased the number of board members of the Connecticut Health Insurance Exchange by five, failed to be called for a vote on the Senate floor after passing in the House.” Read the update>>

State of the States: Health Insurance Exchanges — May 4, 2012 (McKenna Long & Aldridge LLP)

“This was an interesting week for exchange watchers, with a growing chorus of states considering the merits of moving exchange legislation forward to avoid the federal government establishing an exchange on their behalf… That same logic drove the Louisiana Senate Insurance Committee to vote exchange-enabling legislation out of committee and to the Senate floor this week… In Kentucky, Governor Steve Beshear (R) announced on Thursday that if the Supreme Court upholds the ACA, he will establish a health insurance exchange by executive order to avoid having the federal government create an exchange in the state.” Read the update>>

Legislature Makes Bold Move Toward Free-Market Health Care (Lane Powell PC

“In the closing hours of the 2012 Oregon legislative session, the Oregon Legislature paved the way for the Oregon Health Insurance Exchange. The exchange will create a marketplace for health insurance policies for individuals, families, and small employers. It will also allow employers to allocate defined contributions to employee coverage and let employees show for coverage that best meets their needs.” Read the update>>

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