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Insurance Law

HHS Releases Final Rule and Interim Final Rules on Affordable Care Act's State Health Insurance Exchanges

Duane Morris

On March 12, 2012, the U.S. Department of Health and Human Services (HHS) released the long-anticipated Final Rule and Interim Final Rules (the "Rules") on the Patient Protection and Affordable Care Act's (ACA) state health insurance exchanges ("Exchange(s)"), a key element of President Obama's healthcare reform plan. Set to go into effect on January 1, 2014, the goals of the Exchanges are to enhance competition, improve availability of affordable health insurance options and allow small businesses the same purchasing power that large businesses currently enjoy. As described in the Rules, the Exchanges will operate as competitive marketplaces, allowing individual consumers and small businesses to directly compare pricing and quality of health insurance options, among other factors.

The Final Rule incorporates two proposed rules originally published in mid-2011 that together implement what HHS refers to as the Exchange establishment and eligibility rules that address the eligibility, enrollment and plan function of the Exchanges. Affording substantial discretion to states in the design and operation of the Exchanges, the Final Rule details minimum federal standards for the establishment and operation of the Exchanges, minimum standards that health insurers must meet in order to participate in the Exchange and offer a qualified health plan, and standards of participation for the Small Business Health Options Program.

Additionally, several of the Rules are being published as Interim Final Rules, and HHS is requesting public comment relating to:

1.   The ability of a state to permit agents and brokers to assist qualified individuals in applying for advance payments of the premium tax credit and cost-sharing reductions for qualified health plans;
2.   Medicaid and CHIP regulations;
3.   Options for conducting eligibility determinations;
4.   Eligibility standards for cost-sharing reductions;
5.   Timeliness standards for Exchange eligibility determinations;
6.    Verification for applicants with special circumstances;
7.   Timeliness standards for the transmission of information for the administration of advance payments of the premium tax credit and cost-sharing reductions; and
8.   Agreements between agencies administering insurance affordability programs.

All public comments must be received by 5 p.m., 45 days from the date the Interim Final Rules are published in the Federal Register, which is currently set for March 27, 2012. The Final Rule will go into effect 60 days from that date. The full preliminary regulatory impact analysis of the Rules may be accessed at Preliminary Regulatory Impact Analysis.

HHS will be publishing separate rules on the ACA's provisions on certificates of exemption from the individual responsibility policy and payment; the definitions of essential health benefits, actuarial value and benefit design standards; and quality standards for the Exchanges and qualified health plans.

For Further Information

If you have any questions about this Alert, please contact Mitchell Goldman, Melissa S. Snyder, Elinor L. Hart, any member of the Health Law Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, or should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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