The Exchange, also known as Health Insurance Marketplace (Marketplace), was created by the Affordable Care Act (ACA) and is a “virtual” one- stop shopping place for individuals and small employers looking to purchase health coverage. The ACA requires each state have an operational Marketplace by January 1, 2014, and to start open enrollment by October 1, 2013. It is intended to help individuals and small employers have more high-quality, affordable health insurance plans from which to choose in a more competitive setting.
Multi-State Plans (MSPs) are among the health insurance options from which individuals and small employers will be able to choose when they enroll for coverage in a Marketplace in 2014 or later. MSPs are plans from the same issuer that will be available for families and small businesses that reside or operate in more than one state. Examples: a family with a child in college in another state, or a small employer headquartered in Utah that also has employees who reside in Nevada and California. The ACA authorized the Multi-State Plan Program (MSPP), which allows at least two (2) health plans to be offered on a nationwide basis in every State’s Marketplace. Specifically, the ACA directs the U.S. Office of Personnel Management (OPM) to enter into contracts with private health insurance issuers to provide at least two Multi-State Plans (MSPs) to be offered in each State’s Marketplace. At least one of these issuers must be a non-profit entity.
On March 1, 2013, the U.S. Office of Personnel Management (OPM) published the final rule for the Multi-State Plan Program (MSPP) establishing standards for the MSPP and OPM’s approach to implementation of section 1334 of the Affordable Care Act. The final MSPP rule largely adopts the proposed rule (which was issued in December 2012) with little modification. In general, MSPP issuers must comply with state licensure requirements, as well as OPM program and contract requirements. These include non-discrimination rules and any state laws that are more protective of consumers than requirements under the MSPP.
Objectives of the MSPP
- Offer plans from the same issuer to families or small businesses that may reside or operate in more than one State;
- Ensure a choice of at least two high-quality products to consumers participating in the Marketplace;
- Promote competition in the Marketplace to the benefit of all consumers;
- Provide strong, effective contractual oversight of the issuers that choose to offer MSPs;
- Work cooperatively with States and the U.S. Department of Health and Human Services (HHS) to ensure a level playing field for Qualified Health Plans (QHPs) and MSPs.
Highlights of the Final Rule
- The final rule establishes standards for MSPP issuers who want to participate in the MSPP. The MSPP will be governed by all State and Federal laws that apply to Qualified Health Plans (QHPs) and there must at least two issuers offering MSPs in at least 31 Marketplaces this year, with coverage to be extended to the Marketplaces in every State and the District of Columbia by 2017.
- The final rule states MSPs should be neither competitively advantaged nor disadvantaged in the Marketplaces. States’ traditional role in regulating their insurance markets is preserved. Standards are consistent with standards applicable to QHPs in each State. A process for informal resolution of disputes that arise in the future between States and OPM concerning MSPs will be established.
- The final rule establishes standards related to how OPM will coordinate with States and HHS to approve rates, standards for rating, medical loss ratios, and an MSPP issuer’s participation in reinsurance, risk adjustment, and risk corridor programs.
- The final rule establishes OPM’s process for MSPP application and contracting procedures, including review of applications, contract negotiations, terms of the MSPP contract, and contract renewal and nonrenewal.
- The final rule establishes how OPM will monitor contract performance for the MSPP, including ensuring quality assurance, preventing fraud and abuse, and possible contract compliance actions.
- The final rule establishes a process and standards for handling appeals for enrollees that are denied claims for payment or service.
- MSPs must comply with the otherwise applicable cost-sharing limits (unless state law imposes stricter requirements), and MSPP insurers must ensure that eligible individuals receive advance payment of premium tax credits and cost-sharing reductions. Insurers must offer in each state at least one plan at each of the gold and silver metal levels; bronze or platinum levels of coverage may also be offered.
- An insurer may phase in its MSPP coverage over four years but must provide coverage in all states by 2017 (thus, an MSP may not be available in every state until 2017). Coverage may also be phased in within a state, subject to state laws on service-area coverage.
- MSPs must provide SHOP coverage only if required to do so by the rules for the federally-facilitated SHOP program or by state law in states with state-based Exchanges.
The initial open enrollment period for MSPs, as with qualified health plans, begins October 1, 2013 for coverage beginning January 1, 2014. Individual and small businesses wishing to enroll in MSPs will then be able to enroll through the Health Insurance Marketplace in their state. However, MSPs may not be available in every state until 2017.