HIX Final Rule Released

The final rule released Monday by the Department of Health and Human Services to guide the development by states of health insurance exchanges (HIX) can be summed up in a single word: flexibility.

States had argued that HHS was taking on too much of a role in HIX development. The final rule provides states with more options in terms of the operation of the HIX, health plan participation, and member eligibility.

States will be able to:

• Decide if the HIX will be operated by a non-profit organization established by the state, as an independent public agency, or as part of an existing state agency. A state can also choose to partner with other states on a regional HIX or it can operate multiple HIX that cover distinct geographic distinct areas within the state.
• Set additional standards for health plans offered in an exchange to make sure consumers have access to a variety of providers
• Decide how a HIX interact with Medicaid agencies when making eligibility determinations—the HIX can conduct complete eligibility determinations for Medicaid or it can make a preliminary assessment and then rely on the state Medicaid agency for a final decision
• Decide if brokers or agents can sell insurance through the HIX
• Gain conditional approval of its HIX by Jan. 1, 2013 if the state demonstrates that it has made sufficient progress in the development of the HIX and it will be operationally ready by Oct. 1, 2013. HHS will provide additional details in future guidance.

The 644-page final rule also provides states with new options in terms of operating their own Small Business Health Options Program (SHOP). States can set the size of the small group market at either one to 50 or one to 100 employees until 2016 when employers with up to 100 employees can participate in a SHOP.

Starting in 2017, states will have the option to let businesses with more than 100 employees buy large group coverage through the SHOP.

Through the SHOP, states may allow employers to select a single plan to cover their employees or offer multiple levels of coverage.

"These policies give states the flexibility they need to design an Exchange that works for them," said HHS Secretary Kathleen Sebelius in a press statement announcing the final rules. "These new marketplaces will offer Americans one-stop shopping for health insurance, where insurers will compete for your business. More competition will drive down costs and Exchanges will give individuals and small businesses the same purchasing power big businesses have today."

HIX, which were created by the Patient Protection and Affordable Care Act, are expected to provide health insurance coverage for an estimated 11.5 million people, including members of Congress, in 2014.

A portion of the rule is issued on an interim final basis. HHS will consider additional public comments for 45 days for several provisions including:

• 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.
• Certain Medicaid and CHIP regulations
• Options for conducting eligibility determinations
• Eligibility standards for cost-sharing reductions
• Timeliness standards for HIX eligibility determinations
• Verification for applicants with special circumstances
• Timeliness standards for the transmission of information for the administration of advance payments of the premium tax credit and cost-sharing reductions
• Agreements between agencies administering insurance affordability programs.