May 18, 2012

Guidance on Federally Facilitated Exchanges and Exchange Grants

Implementing Federally Facilitated Exchanges – partnering with states and consulting with stakeholders

On May 16, 2012, Department of Health and Human Services (HHS) published documents and information around implementation of Exchanges: The General Guidance on Federally Facilitated Exchanges (FFEs), a Cooperative Agreement and Blueprint Request for Information (RFI) and an announcement of additional Establishment Grants awarded to six states.

The Guidance on FFEs, which will start in 2014 where states will not operate a state-based Exchange, covers HHS’ operational approach to implementing an FFE, including:

1.     How states can partner with HHS to implement selected functions therein

2.     Key policies organized by Exchange function

3.     How HHS will consult with a variety of stakeholders for implementation

Comments on this Guidance are due by June 18, 2012.

In this Guidance, HHS outlined four “guiding principles” for FFEs, based on comments on the proposed rules of Exchange establishment and eligibility, and other input from stakeholders:

1.     Commitment to consumers

2.     Market parity

3.     Leveraging the traditional state role

4.     Engaging with states and other stakeholders

Commitment to Consumers
With a goal to ensure consumers in all 50 states and D.C. have access to high-quality, affordable health coverage options and to promote consumer choice, HHS intends to certify as a Qualified Health Plan (QHP) any health plan that meets all certificate standards, at least in the first year. HHS will continue to seek improved policies and processes in each Exchange in pursuit of a positive and seamless consumer experience.

FFEs will offer a website, toll-free hotline and other in-person assistance. HHS envisions that consumers will be able to receive in-person assistance from a variety of other consumer resources, including agents and brokers. FFEs will establish Navigator programs by awarding grants to eligible entities that can assist consumers in understanding insurance affordability programs, comparing and selecting QHPs, and interacting with QHP issuers, State agencies, and the FFE. HHS intends to establish a fully operational Navigator program in every FFE by October 1, 2013. The goal is to have all entities and individuals serving as Navigators fully trained, certified and ready to serve consumers, including disabled and those with limited English proficiency.

Market Parity 
HHS will work to harmonize market requirements on and off an FFE to promote the competitiveness of each FFE, minimize administrative burden for issuers and ensure consumer protections.

Leveraging Traditional State Roles 
HHS intends to work with states—to the greatest extent possible—to preserve the traditional responsibilities of state insurance departments when establishing an FFE.  Recognizing the significant experience and traditional role of states in many core areas of FFE operations, HHS will seek to capitalize on existing state policies, capabilities, and infrastructure that can also assist in implementing some of the components of an FFE.

Engaging States and Other Stakeholders 
HHS will seek input from a variety of stakeholders to support and inform decision-making. HHS will communicate progress regularly so affected parties understand how each FFE is developing and have adequate time to prepare for successful participation.

Subsequent guidance will include additional policy and operational details to inform state decision-making and preparation for Exchange participation, roles and responsibilities and potential areas of collaboration.

Comments on the Cooperative Agreement and Blueprint are due by June 18, 2012. States seeking to operate a state-based Exchange or electing to participate in a state-federal partnership Exchange must complete a two-step Blueprint process, submitting both a Blueprint declaration letter and a Blueprint application. The Blueprint Application is due no later than 30 business days prior to the required approval date of January 1, 2013 (i.e., no later then November 16, 2012 for plan year 2014).  If a state submits its declaration Letter at least 20 business days prior to the submission of its Blueprint, the state may request consultation with the Centers for Medicare and Medicaid Services (CMS) regarding preparation of its application. States that plan to defer to the FFE without partnership are invited to submit a declaration letter but do not need to complete the Exchange application.

HHS also announced new Exchange establishment grants awarded to six states (IL, NV, OR, SD, TN and WA), bringing the total of Exchange-related grants provided to states over the last two years to more than $1 billion. States can continue to apply for Exchange grants through the end of 2014, with funds available for states to use in establishing Exchange functionality beyond 2014.

Cigna is continuing to review the Guidance and the Exchange Blueprint RFI. We will update communications as we continue our in-depth review and receive additional guidance from HHS. As always, we encourage you to bookmark our health care reform website, InformedOnReform.com.