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HHS releases much-anticipated insurance exchange proposed rulemaking

Deltek Analyst Stephen Moss reports.

On July 11, 2011, the Department of Health and Human Services (HHS) released two notices of proposed rulemaking (NPRM) related to state health insurance exchanges. One of the NPRMs provides guidance on the establishment of the exchanges by outlining federal requirements for states that elect to establish their own exchange, for health insurers looking to offer qualified health plans in the exchanges, and for employers who wish to participate in the Small Business Health Options Program (SHOP). The NPRM is currently open for 75 days of public comment, with final rules expected by year-end.

The proposed rule is notable for the considerable flexibility it gives to states in both the governance and structure of the exchange. The rule opens the door for states to use a state-federal partnership model that will combine state-designed and operated business functions with federally-designed and operated functions. Though by no means required, this option could be used by states in areas such as eligibility and enrollment and health plan management. Also notable in the NPRM is the governance flexibility afforded to the states. HHS further codifies the notion from the Affordable Care Act (ACA) that an exchange must be run by a government agency or nonprofit entity established by the state.

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