State Marketplace Profiles: Kentucky
Final update made on November 11, 2013 (no further updates will be made)
Establishing the Marketplace
On July 17, 2012, Governor Steven L. Beshear (D) issued Executive Order 587 establishing the Kentucky Health Benefit Exchange (KHBE) after the Supreme Court ruled to uphold the Affordable Care Act (ACA).1 In May 2013, the state announced that its online Marketplace would be called kynect.
Prior to the Executive Order, the Kentucky Cabinet for Health and Family Services led Marketplace planning in the state. Working collaboratively with the Department for Medicaid Services and the Kentucky Department of Insurance, the state developed an interagency team that met regularly to define issues of governance, information technology (IT), and eligibility.2 In June 2012, the state released survey results revealing stakeholder support for a State-based Marketplace with an independent governing board.3
Structure: The Executive Order establishes the Office of the Kentucky Health Benefit Exchange “within the Cabinet for Health and Family Services.” The Order also creates four divisions within the Office: the Division of Health Care Policy and Administration, the Division of Information Systems, the Division of Financial and Operations Administration, and the Division of Communication and Outreach.
Governance: The Office of the Kentucky Health Benefit Exchange will review and discuss issues with an Advisory Board. Executive Order 587 called for an 11-member board; however, the Governor expanded the size of the Board to 19 members prior to announcing the appointments. The Advisory Board includes three ex-officio members (or their designees): the Commissioner of the Department of Medicaid Services, the Commissioner of the Department of Insurance, and the Commissioner of the Department for Behavioral Health and Developmental and Intellectual Disabilities. The Commissioner of the Department of Insurance serves as Chair of the Board. The Governor appointed 16 members, three representatives of insurers that offer plans in the state, one representative of insurance agents licensed to sell in the state, three representatives of non-facility based health care providers licensed in the state, four representatives of facility based health care providers licensed in the state, one small business representative, one representative of an individual purchaser of health plans, and three consumer representatives. Board members are required to have relevant experience in health benefits administration, health care finance, health plan purchasing, health care delivery system administration, public health, or health policy issues related to the small group and individual markets and the uninsured.
On September 19, 2012, Governor Beshear appointed members to the Advisory Board.4 The appointed Board members are:
- Deborah Moessner, Anthem Blue Cross and Blue Shield
- Jeff Bringardner, Humana
- Carl Felix, Bluegrass Family Health
- Marcus Woodward, Woodward & Associates
- Connie Hauser, P.T. Pros Inc
- John Thompson, Lee & Lee P.S.C.
- Dr. Michael Huang, Kentucky Clinic South
- Ruth Brinkley, KentuckyOne Health
- Julie Paxton, Mountain Comprehensive Care Center
- Ed Erway, University of Kentucky Healthcare
- Donna Ghobadi, Central Baptist Hospital
- Joe Ellis, Eye Care Associates of Kentucky
- Gabriela Alcalde, Foundation for a Healthy Kentucky
- David Allgood, Center for Accessible Living
- Andrea Bennett, Kentucky Youth Advocates
- Tihisha Rawlins, AARP
An Executive Director for the Office of the Kentucky Health Benefit Exchange has been appointed by the Governor.5 The Secretary of the Cabinet for Health and Family Services will appoint a Director for each newly created Division within the Office. The Board established advisory sub-committees consisting of consumers or other stakeholder groups to study specific policy issues and advise the Board.6
Contracting with Plans: The KHBE functions as a clearinghouse and works in partnership with the Department of Insurance (DOI) to certify Qualified Health Plans (QHPs). In May 2013, Kentucky released final regulations detailing requirements for certification and participation of QHPs and dental plans on the Marketplace.7 Issuers may offer QHPs in the individual Marketplace or the SHOP. In both markets, issuers may not offer more than four QHPs within a metal level of coverage. KHBE considers the same plan offered with dental benefits and without dental benefits to be one QHP. Issuers are not required to participate both inside and outside the Marketplace; however, rates must be the same for plans offered in both markets. The KHBE will conduct final certification of QHPs no later than August 31 for the following plan year, and QHPs will be recertified every two years. Five carriers currently participate in kynect, and consumers may browse plans and rates using the Marketplace portal.
Issuers must ensure that a QHP’s provider network is available to all enrollees within the QHP service area and includes providers that specialize in mental health and substance abuse services. At least 20% of available essential community providers (ECPs) in the QHP service area must participate in the provider network and issuers must contract with at least one ECP in each ECP category in each county in the service area. Issuers must also make provider network directories for QHPs available to the KHBE for online publication.
Issuers must submit information on enrollment, denied claims, rating practices, cost-sharing, and payments for out-of-network coverage to the KHBE, DOI, and HHS and provide public access to the data. Issuers are also required to establish and report on quality improvement strategies.
Dental and Vision Benefits: QHPs with embedded dental benefits, QHPs without dental benefits, and stand-alone dental plans may be sold through kynect. Stand-alone dental plans must offer one variation with 70% actuarial value and one variation with 85% actuarial value. Insurers must also limit annual cost-sharing to $1,000 for a plan with one child enrollee or $2,000 for a plan with two or more child enrollees. Insurers may offer a stand-alone plan that covers individuals regardless of age, as long as it includes the pediatric dental essential health benefit required under the Affordable Care Act.7
Consumer Assistance and Outreach: Navigators, In-Person Assisters (IPAs), and Certified Application Counselors are collectively known as kynectors and are responsible for conducting public education activities and facilitating enrollment into health coverage through the Marketplace. In August 2013, the KHBE awarded a total of $4.3 million in IPA grant funding to two kynector organizations that will provide education and enrollment assistance to individuals and small businesses in five of the state’s eight Medicaid regions.8 The state issued a Request for Proposals in early September for kynector organizations in the remaining three regions,9 and in November awarded a total of $2.15 million to three grantees.10 Consumers may search for a kynector by name, organization, location, or language on the kynect website.
Licensed agents and brokers also play a role in enrolling individuals and small employers into coverage through kynect. Agents/brokers must be appointed by at least two issuers selling coverage through kynect to participate on the Marketplace, unless they are directly employed by a participating issuer. Agents/brokers are also required to take an online training course and complete a registration and verification process.11 Consumers may use an online tool to search for an agent by name, agency, location, or language. Web brokers will not initially be allowed to sell on kynect but their participation may be considered in the future.
In May 2013, the KHBE introduced kynect as the state’s health insurance Marketplace and launched a public education and awareness campaign. As part of the branding effort, the KHBE also launched a website that now serves as a portal to enrollment for consumers and features tools such as a health plan savings calculator. In August 2013, the state began initial marketing efforts, including online advertisements targeting young adults and establishing a presence at the state fair and local events. Kynect launched a broader marketing campaign at the beginning of open enrollment, including television, newspaper, billboard, hospital kiosk, and bus advertisements. The messaging of the advertisements shifted from general awareness to directing consumers how to take action and enroll into coverage.12 The KHBE has also established partnerships with local agencies, such as the Department for Public Health, to assist in education and outreach activities.8
In April 2013, Kentucky procured a subcontractor to design, implement, and maintain a contact center.13 The contact center opened in mid-August and has a staff of 100 representatives that are available via phone, email, or live online chat. Services are available in English, Spanish, and other languages.14
Small Business Health Options Program (SHOP) Marketplace: As defined by regulations approved in September 2013, small employers will be limited to groups of fewer than 50 employees through 2015 and 1 to 100 employees for 2016 and beyond. The SHOP requires a 75% minimum group participation rate. Employers will offer employees a single QHP, all available QHPs in one metal level of coverage, or one or more QHPs at more than one metal level of coverage, if the metal levels are contiguous. If an employer offers more than one QHP, the employer will select a QHP to serve as a reference plan for purposes of determining premium contributions. Employers will contribute a minimum of 50 percent toward the premium for employee-only coverage under the reference plan. Employers that choose to offer employees a single QHP must also contribute a minimum of 50% toward the premium. 15
Financing: Kynect will cost an estimated $39.5 million to operate in its first year. The KHBE is considering funding the Marketplace through an assessment of insurers inside and outside of kynect, which is the current funding mechanism for Kentucky’s high risk pool. The Marketplace will not be financed through the General Fund.16
Essential Health Benefits (EHB): The ACA requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Marketplace, cover certain defined health benefits. States must decide whether to benchmark their EHB plan to one of ten plans operating in the state or default to the largest small-group plan in the state. Kentucky recommended the state use the Anthem Preferred Provider Organization (PPO) as the benchmark plan and KCHIP as the pediatric dental and vision supplement.17
In September 2010, the Kentucky Cabinet for Health and Family Services’ Office of Health Policy received a federal Exchange Planning grant of $1 million and in August, the same agency was awarded a federal Level One Establishment grant for almost $7.7 million to fund IT systems. In February 2012, the agency was awarded a $57.8 million grant to continue planning and building the requisite IT systems which will provide integrated eligibility and enrollment with the Medicaid program. In September 2012, Kentucky received a third Level One grant of $4.4 million to support the development of a Navigator program and assess access to health care services. The state was awarded a Level Two Establishment Grant for $182.7 million in January 2013 to develop a consumer and stakeholder support network and to complete an interoperable IT system that will integrate Kentucky’s Health Benefit Exchange with all of Kentucky’s existing health and human services programs.18
On December 14, 2012, Kentucky received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a State-based Marketplace.19 The kynect Marketplace portal became operational on October 1 and began enrolling qualified individuals, families, and small businesses into coverage.
Executive Order 587. July 17, 2012.
Exchange Planning Grant Third Quarterly Report. Submitted September 1, 2011.
Office of Health Policy. Stakeholder Perspectives on Health Benefit Exchanges. Kentucky Cabinet for Health and Family Services, June 2012.
“Gov Beshear Appoints Members to Health Exchange Board.” September 18, 2012. Governor Beshear’s Communications Office.
‘Beshear Issues Executive Order Creating Kentucky Health Benefit Exchange.’ July 17, 2012. Lex18.com.
900 KAR 10:010E. Exchange Participation Requirements and Certification of Qualified Health Plans and Qualified Dental Plans. May 13, 2013.
Kentucky Cabinet for Health and Family Services. “Cabinet Awards kynector Grants.” August 20, 2013.
Kentucky Health Benefit Exchange. “kynector/In-Person Assister Program Request for Proposal (RFP) has been issued.” September 5, 2013.
“Additional funding awarded for contractors to help with health care coverage.” November 2, 2013.
900 KAR 10:050E. Individual Agent or Business Entity Participation with the Kentucky Health Benefit Exchange. July 3, 2013.
“In glare of spotlight, Kentucky’s Obamacare program is ready, experts say.” September 28, 2013.
“Gov. Beshear celebrates opening of kynect customer service center in Lexington.” August 16, 2013.
900 KAR 10:020. Kentucky Health Benefit Exchange Small Business Health Options Program. September 12, 2013.
Kentucky Health Benefit Exchange Advisory Board Meeting Minutes. December 20, 2012.
Kentucky Department of Insurance Statement on Recommendation for Benchmark Plan. October 1, 2012.
Letter from HHS to Governor Beshear. December 14, 2012.