Exchange Election
Source: United Benefit Advisors
The purpose of an exchange is to make it simpler for individuals and small businesses to obtain coverage. The exchanges will not provide insurance, but they will provide a way for people to compare the cost and coverage available from different insurers, provide resources to individuals to help them choose a plan, and oversee the insurance options available through the exchanges. Virtually all Americans will be able to buy coverage through an exchange, even if they have access to coverage through an employer. However, premium subsidies will not be available to people who have access to adequate coverage through their employer, no matter how large or small their employer is, but who choose to buy through the exchange instead. Recently, the government has begun calling the exchanges the “health insurance marketplace.”
Each state will choose its own “essential health benefits” package, although all insurance provided to individuals and small groups (generally, those with 100 or fewer employees) must provide certain types of “essential” coverage. (Self-funded and large employers are not required to provide the “essential health benefits.” Instead, these plans will need to cover “core” benefits (hospital and emergency care, physician and mid-level practitioner care, pharmacy, and laboratory and imaging) at a 60 percent actuarial value to avoid employer penalties.)
For additional information on each state’s EHB, go here: Additional Information on Proposed State Essential Health Benefits Benchmark Plans | cciio.cms.gov
Employers should understand that even if they offer coverage to their employees, they will have some interaction with the exchanges. If any employee chooses to purchase coverage through the exchange and requests a premium subsidy, the exchange will need information about the coverage offered to employees from the employer.
Currently there is debate about whether people in a federally-facilitated exchange will be eligible for the premium tax subsidy. The federal government’s position is that these people will be eligible for the subsidy, as it was not Congress’ intent to treat people differently based upon where they live. Employers hoping to avoid the play or pay penalty have an interest in this question because penalties are triggered by the employee’s receipt of a premium tax subsidy through the exchange. If subsidies are not available through the federally facilitated exchanges, employers in those states would not be subject to penalties. This issue likely will be settled by the courts (Oklahoma has filed a lawsuit), but in the meantime, employers in states that will have FFEs should not assume the penalties will not apply to them. Also, note that those who obtain coverage through private exchanges will not be eligible for the premium tax subsidies.
Whether a state runs its own exchange is a year by year decision, so, for example, a state that has an FFE or a partnership exchange for 2014 could run its own exchange in 2015.
Click Map to See results for your state
The States: Where They Stand
| State | Type of Exchange | Medicaid Expansion |
| Alabama | Federal | No |
| Alaska | Federal | Undecided |
| Arizona | Federal | Yes |
| Arkansas | Partnership | Yes |
| California | State | Yes |
| Colorado | State | Yes |
| Connecticut | State | Yes |
| Delaware | Partnership | Yes |
| Florida | State | Yes |
| Georgia | Federal | Undecided |
| Hawaii | Federal | No |
| Idaho | State | Yes |
| Illinois | State | No |
| Indiana | Federal | Undecided |
| Iowa | Partnership | Undecided |
| Kansas | Federal | Undecided |
| Kentucky | State | Undecided |
| Louisiana | Federal | No |
| Maine | Federal | No |
| Maryland | State | Yes |
| Massachusetts | State | Yes |
| Michigan | Partnership | Undecided |
| Minnesota | State | Yes |
| Mississippi | Federal | No |
| Missouri | Federal | Yes |
| Montana | Federal | Yes |
| Nebraska | Federal | Undecided |
| Nevada | State | Yes |
| New Hampshire | Federal | Undecided |
| New Jersey | Federal | Undecided |
| New Mexico | State | Yes |
| New York | State | Undecided |
| North Carolina | Federal | No |
| North Dakota | Federal | Undecided |
| Ohio | Federal | Yes |
| Oklahoma | Federal | No |
| Oregon | State | Undecided |
| Pennsylvania | Federal | Undecided |
| Rhode Island | State | Yes |
| South Carolina | Federal | No |
| South Dakota | Federal | No |
| Tennessee | Federal | Undecided |
| Texas | Federal | No |
| Utah | State | Undecided |
| Vermont | State | Yes |
| Virginia | Federal | Undecided |
| Washington | State | Yes |
| West Virginia | Partnership | Undecided |
| Wisconsin | Federal | Undecided |
| Wyoming | Federal | Undecided |
Source for exchange elections: Kaiser Family Foundation
Source for Medicaid expansion: The Advisory Board Co.
Notice of Exchange Option is Delayed
In an FAQ issued January 24, 2013 by the Department of Labor, the employer mandate to provide employees with a notice of coverages available through the Exchanges is being delayed. The original required distribution date of March 1, 2013 has been delayed until the late summer or fall of 2013.
The Department of Labor FAQ states…..
“The Department of Labor has concluded that the notice requirement under FLSA section 18B will not take effect on March 1, 2013 for several reasons. First, this notice should be coordinated with HHS’s educational efforts and Internal Revenue Service (IRS) guidance on minimum value. Second, we are committed to a smooth implementation process including providing employers with sufficient time to comply and selecting an applicability dates that ensures that employees receive the information at a meaningful time. The Department of Labor expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.”
States get more time on exchanges
Source: benefitspro.com
By: Kathryn Mayer
The Obama administration is giving states extra time to decide whether they’ll work on implementing a key feature of health reform.
Health and Human Services Secretary Kathleen Sebelius told state governors in a letter Friday that they can have another three months to decide if they will split the task of running an exchange with the HHS or if they want to leave it entirely up to the government.
Sebelius said she still wants states to tell HHS their intentions by the original Nov. 16 deadline, but they now have until Dec. 14 to submit blueprints showing how they would operate the exchanges. Those who want to partner with the federal government have until Feb. 15 to tell the federal government so.
The move may be a concession to the many states who had said they were waiting until after the presidential election to comply with the PPACA mandates. Many Republicans and opponents of reform hoped that Republican Mitt Romney would win and begin work on repealing the law.
Under the Patient Protection and Affordable Care Act, exchanges would operate in every state to allow individuals to buy health insurance. Exchanges can be run by individual states, by the federal government or by a combination of the two under an arrangement known as a “state partnership exchange.” The exchanges are scheduled to begin operating on Jan. 1, 2014.
“This Administration is committed to providing significant flexibility for building a marketplace that best meets your state's needs,” Sebelius wrote in her Nov. 9 letter. “We intend to issue further guidance to assist you in the very near future.”
Though the law intended that each state run its own exchange, many governors have refused to do so. Others have complained there hasn’t been enough guidance from the government on how to do so. For those that don’t intend to set up an exchange, the government will set up one for them.
Despite the looming deadline, most states haven’t told the government what their plans are for their state exchange. About 15 states are working on setting up their own.
Since last week's election, a handful of states, including Texas and Florida, have said they will not pursue a state-based exchange. Some conservative groups have been encouraging states to not take action on exchanges, telling them that resistance shows the government their dissatisfaction with health reform.
What is an exchange and how does it work?
Source: https://www.liazon.com
An exchange is an online store where employees can purchase benefits. Exchanges offer multiple options of health insurance plans, and may also offer other benefits, such as dental, vision, life, disability, and other options. Exchanges that are "private" are run by industry, while "public" exchanges are run by the government.
In most cases, the employer uses a defined contribution strategy to give each employee a set amount of money to purchase benefits. The employees and their families can then go shopping in the exchange with the money allocated by their employer and add their own if needed. Depending on the exchange, employees can receive guidance and education about the plans to help them make purchasing decisions.