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New Rule Finalizes Plan For Health Insurance Exchanges

Despite the possibility that the Supreme Court’s upcoming decision on the constitutionality of the Patient Protection and Affordable Care Act (PPACA) could derail advancing federal regulations, the Department of Health and Human Services (HHS) published a final rule on Health Insurance Exchanges that took effect May 29, 2012.

An exchange is a special, government-facilitated market in health insurance designed to expand access to affordable coverage for small businesses and individuals who do not enjoy the buying power of large companies and other entities with many employees. Even so, uninsured individuals may choose not to purchase insurance and, instead, pay the penalty set by PPACA.

Provisions of the new rule may not directly affect LIUNA’s health and welfare funds or their participants, but they could assist friends and extended family members of Laborers who are currently without insurance due to its high cost. Although it does not now seem likely, funds may experience more direct impact if the cost of coverage available through exchanges is low enough to entice signatory employers or members to abandon plans established through collective bargaining.

Mandated by PPACA and set to begin operation on January 1, 2014, exchanges will be administered by the states unless they opt for federal management. States must report on their progress in establishing exchanges by January 1, 2013, and federal authorities are empowered to take over exchange creation in states that have not made adequate progress or decide not to operate their own exchange. Most states, making the assumption that the Court will uphold PPACA or, at least, its exchange provision, have begun preparations.

The final rule includes standards for:

  • The establishment and operation of an exchange
  • Health insurance plans that participate in an exchange
  • The eligibility of individuals to enroll in exchange health plans and in programs that provide financial assistance
  • Enrollment in health plans through exchanges
  • Employer eligibility for participation in the Small Business Health Options Program (SHOP)

The new rule combines policies from two sets of proposed rules issued last summer. These are summarized in the LIFELINES ONLINE article, Health Insurance ‘Exchanges’ Come into Focus.

The LHSFNA Health Promotion Division is monitoring regulatory developments related to PPACA and its implementation. Updates are published on the Fund’s Health Care Reform Updates page.

[Steve Clark]

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