Health care exchanges

Scope

To provide a source, the law required the establishment of exchanges in each state. Where states do not establish an exchange, the federal government will step in to do so.

Regulatory citations

• None

Key definitions

• None

Summary of requirements

Starting in 2014, health care exchanges are to help individuals and small businesses:

• Compare health plans,
• Get answers to questions,
• Find out if they are eligible for tax credits for private insurance or health programs like the Children’s Health Insurance Program (CHIP), and
• Enroll in a health plan.

The exchanges are to be competitive marketplaces offering a comprehensive package of items and services, known as essential health benefits. Insurance policies must cover these benefits in order to be certified and offered in exchanges.

• Small employers. Small employers will also be able to purchase coverage in exchanges through Small Business Health Options Programs (SHOPs). Businesses with up to 100 employees will be eligible, although states can limit participation to business with only up to 50 employees until 2016.
• Large employers. If large employers do not provide minimum essential coverage, and at least one full-time employee obtains a premium credit to obtain coverage in an exchange, the employer will be subjected to a penalty.
• Notice. Effective March 1, 2013, employers will need to provide employees a notice of exchanges along with the related items such as tax credits or cost-sharing reductions. The notice must inform employees of the existence of an exchange, including a description of the services provided by the exchange, and how the employee can contact the exchange to ask for assistance.
• Tax credit. Exchanges will need to verify an individual’s access to employer-sponsored coverage to determine eligible for a premium tax credit. The individual must provide the exchange information regarding such access to employer coverage. The exchange must notify the employer of the eligibility determination, the ID of the employee, that the employer (if 50 employees) may be liable for a penalty, and that the employer may appeal the determination.

The federal agencies are assessing a variety of methods to relay employer-sponsored coverage as well as templates employers could complete and give to employees when they want to apply for coverage in an exchange.

The ACA also required the creation of the Health Choices Administration, a federal agency that would oversee its provisions, including the establishment of health plan benefit standards, establishment and operation of the health insurance exchanges, and administration of individual affordability credits or subsidies. The commission’s additional responsibilities would include prevention of abuses within the Health Insurance Exchange system.