How health insurance exchange money is spent, which private insurance products may be offered on exchanges, who advises exchange consumers on plan choices and how well exchanges handle personal data will be under federal scrutiny, as explained in proposed program integrity rules issued by CMS on June 17. The rules also propose tweaks to existing regulatory language to better address certain employer plan designs and to reconcile some definitional inconsistencies affecting employer plans.
The proposed rules determine how federal government agencies will oversee the integrity of state, federal and mixed health insurance exchanges, premium stabilization programs under health reform.
The rules include (1) oversight and financial integrity standards; (2) proposals on insurer participation in individual exchanges and small business health option programs; (3) new standards on guaranteed availability and renewability, among other things (see bullet list below). The rules were put on public display on June 17 and will be published officially on June 19.
Enforcement Priorities
Starting Oct. 1, 2013, qualified individuals and qualified employers can buy health coverage through exchanges or marketplaces. Coverage starts as soon as Jan. 1, 2014 and states must certify that such coverage meets certain standards.
The rule proposes rules for exchanges to do the following:
- Set up an enrollee satisfaction survey system.
- Charge insurers user fees in order that exchanges remain self-sustaining. (User fees must be administered properly and not wasted.)
- Certify insurance products as qualified health plans. (The decision whether coverage is a QHP must be based on the interest of consumers.)
- Certify brokers as being able to sell and give advice on coverage for sale on exchanges, and to help consumers get tax credits and cost-sharing reductions.
- Set up transitional reinsurance and risk-corridor programs.
- Ensure the privacy of data, and ensuring that data is used only for exchange enrollment, eligibility determinations, efficient operations, and applications for tax-credits and cost-sharing reductions.
HHS is authorized to oversee the financial integrity, compliance, efficiency and non-discriminatory administration of state exchanges. HHS may levy fines on states to enforce its exchange-integrity rules.
The feds expect individual-market exchanges to have separate design, structure and governance from SHOP exchanges, where small businesses can buy coverage for their workforces. But states have the option of merging the two together, and the proposed rule sets out rules for doing that.
The rule encourages flexibility of program integrity measures when a state is running an exchange or a SHOP program. The rules are more prescriptive when exchanges are in partnership with the feds, and when exchanges are run by the federal agencies.
An exchange may be run: (1) by a state alone, (2) by a state in partnership with the federal government; or (3) by the federal government alone (in cases where states refuse to set up an exchange).
For more information on state-based health insurance exchanges, see Section 810 of the Health Reform Law: What Employers Need to Know.