Final update made on November 8, 2013 (no further updates will be made) 

Establishing the Marketplace

On June 1, 2011, Governor John Hickenlooper (D) signed SB 11-200 into law, establishing the Colorado Health Benefit Exchange.¹  In January 2013, the Exchange announced that the online Marketplace would be called Connect for Health Colorado (C4HCO).

Structure: The legislation defines Colorado’s Marketplace as a quasi-governmental organization, specifically a “nonprofit unincorporated public entity.”

Governance: The Marketplace is governed by a 12-member board. The Board of Directors includes three ex officio, non-voting members (or their designees): the Executive Director of the Department of Health Care Policy and Financing, the Insurance Commissioner, and the Director of the Office of Economic Development and International Trade. The Governor appoints five voting members, though no more than three from the same political party. The President of the Senate, the Speaker of the House, and the Senate and House Minority Leaders each appoint one voting member to the Board. The legislation specifies that all voting members of the Board should possess specific knowledge and skills in areas related to establishing a Marketplace, such as health benefits administration, health care finance, and/or information technology. It also requires coordination among those making the appointments to ensure the Board includes a broad representation of skill sets and that a majority of voting members are not directly affiliated with the insurance industry. Voting Board members cannot be state employees and no Board members can participate in Marketplace activities in which they have a financial interest. Current voting members of C4HCO’s Board of Directors are:

• Gretchen Hammer (Chair), Colorado Coalition for the Medically Underserved
• Richard Betts (Vice Chair), ASAP Accounting & Payroll Inc.
• Arnold Salazar (Secretary), Colorado Health Partnerships
• Ellen Daehnick, Helliemae’s Handcrafted Caramels
• Stephen ErkenBrack, Rocky Mountain Health Plans
• Dr. Michael Fallon, North Colorado Medical Center
• Eric Grossman, Independent Consultant
• Sharon O’Hara, National Multiple Sclerosis Society
• Nathan Wilkes, Headstorms Inc.

The Board of Directors determines and establishes the development, governance, and operation of the Marketplace. The Board does not have the authority to promulgate rules nor can it duplicate or replace the duties of the Insurance Commissioner, including rate approval. Instead, the legislation established the joint, bipartisan Legislative Health Benefit Exchange Implementation Review Committee to report up to five bills or other measures each year to the legislative council related to planning and establishing C4HCO. The Committee, comprised of ten legislators, is also charged with reviewing the financial and operational plans of the Marketplace and grants for which the Board has applied.

In December 2011, the Legislative Health Benefit Exchange Implementation Review Committee confirmed the Board’s nominee for Executive Director of the Marketplace.

Contracting with Plans: C4HCO will function as a clearinghouse that “foster[s] a competitive marketplace for insurance and shall not solicit bids or engage in the active purchasing of insurance. All carriers authorized to conduct business in [the] state may be eligible to participate in the Exchange.” C4HCO has partnered with the Division of Insurance (DOI), the Department of Public Health, and the Department of Health Care Policy and Finance (HCPF) to perform plan management functions. In August 2013, the DOI approved final plans and rates for 2014; information on plans offered both inside and outside the Marketplace is available on the DOI website. Ten carriers offer a total of 242 plans on the individual Marketplace and eight carriers offer a total of 92 plans on the SHOP Marketplace. Individual market offerings include two Platinum, 27 Gold, 59 Silver, 49 Bronze, and 13 Catastrophic plans. There are 26 Gold, 38 Silver, and 28 Bronze plans available through the SHOP. Carriers must submit plan and rate filings annually, and the state is divided into 11 rating areas.² 

Dental and Vision Benefits: A total of nine dental carriers offer products through C4HCO. 23 qualified dental plans are available through the individual market; nine have high actuarial value (85%) and 14 are offered on the low actuarial value tier (70%). Of the 45 dental plans available through the SHOP, 21 have high actuarial value and 24 have low actuarial value.³ 

Risk adjustment, Reinsurance, and Risk corridors: Colorado has decided to allow the federal government to administer the risk adjustment programs for the Marketplace at least until December 2015.⁴ 

Consumer Assistance and Outreach: In May 2013, Colorado launched a public awareness campaign, including television, print, radio, and billboard advertisements in English and Spanish. The campaign, which lasted for two months, also established C4HCO on various social media platforms, including Twitter, Facebook, LinkedIn, and YouTube.⁵  In September, C4HCO launched a second advertising campaign that focused on providing information about how to enroll into coverage through the Marketplace and emphasized the value of having health insurance. The Marketplace is also partnering with over 100 organizations statewide and has a presence at about 30 events each week, including fairs, festivals, concerts, and sporting events, to perform education and outreach activities.⁶  In May 2013, the Marketplace launched the C4HCO website, which includes a small business tax credit calculator.

The Health Colorado Assistance Network (Assistance Network) provides assistance to consumers seeking health coverage through the Marketplace. In February 2013, the Marketplace issued a Request for Proposals (RFP) for community-based organizations to serve as Assistance Sites and Regional Assistance Hubs in the individual market, the SHOP, or both.⁷  Regional Hubs provide support, supervision, and training for Assistance Sites throughout their region, as well as assist C4HCO with communications efforts throughout the Assistance Network. Assistance Sites hire, train, and supervise Health Coverage Guides, who perform in-person education and application assistance services. In June 2013, C4HCO announced the 57 groups that have been selected to serve as Regional Hubs and Assistance Sites. The organizations received a total of $17 million in federal and private grant funding.⁸  Health Coverage Guides were trained and certified in September and provide services at over 75 locations throughout the state. An Assistance Site directory is available on the C4HCO website.

In addition, licensed agents/brokers  that complete a training course and pass a background check will be authorized to sell health insurance coverage through C4HCO. The certification training includes four to six hours online and eight hours in the classroom.⁹  Agents/brokers are compensated by carriers and will receive the same commission for products sold inside and outside the Marketplace. Brokers will participate in both the individual and SHOP Marketplaces; however, individuals and small businesses will not be required to use a broker. Broker certification began in August 2013 and by early September over 1,300 agents/brokers had taken the certification training.¹⁰  A tool on the C4HCO website allows consumers to search for an agent/broker by zip code, name, state license number, or language.

The C4HCO customer service center opened in early September and provides assistance to individuals and small employers with enrollment through website, telephone, and mail. C4HCO trained around 100 customer service representatives to provide information at different levels. Some are trained to enroll people in coverage, and all representatives will direct individuals to Health Coverage Guides in the community if requested.¹¹ 

Small Business Health Options Program (SHOP) Marketplace: The C4HCO Board agreed with the Department of Insurance recommendation to limit the size of the SHOP Marketplace to employers with 50 or fewer employees in 2014 and 2015. The Board recommended the state keep the individual and SHOP risk pools separate and revisit the decision at a later date.¹²  The Board also agreed to allow employers to select from four options in the SHOP Marketplace; employers can choose a single QHP for all employees, choose a panel of QHPs from a single carrier that represent a range of actuarial values, offer any plan within a single metal tier, or offer any plan that is offered in two adjacent metal tiers.¹³  The Board approved a recommendation for C4HCO to establish minimum employer contribution and employee participation requirements that resemble the outside market.¹⁴ 

Financing: SB 11-200 prohibits Colorado from financing C4HCO using the General Fund. In March 2013, the Board approved a recommendation to assess a carrier administrative fee of 1.4% of premium for products sold on the Marketplace in 2014. In May 2013, the General Assembly passed HB 13-1245, establishing three funding mechanisms for C4HCO that will supplement the revenue generated by the assessment. HB 13-1245 imposes a broad-based assessment on carriers for individual and small group insured lives in the state. The assessment, which will be up to $1.80 per policy per month, will last for a maximum of three years. The law also shifts excess reserves to C4HCO from CoverColorado, the state’s high risk pool that will close in 2014. C4HCO will receive $15 million from CoverColorado in 2014 and $8.5 million in 2015. In June 2013, the Board set a $0 market assessment for medical and dental plans in 2014, determining that funds beyond those being transferred from Cover Colorado would not be needed for the first year of operations.¹⁵  C4HCO’s annual operating budget is expected to be around $26 million.¹⁶ 

Essential Health Benefits (EHB): The Affordable Care Act (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. After soliciting comments from stakeholders and reviewing EHB options, the C4HCO Board announced a draft recommendation for Colorado’s largest small group plan, a Kaiser HMO plan.¹⁷  The Board also made a preliminary recommendation to select Colorado’s Child Health Plan Plus for supplemental pediatric dental benefits.

Marketplace Funding

The legislation prohibits appropriations of state funds for the Marketplace, though Colorado can apply for federal grant funding. The Colorado State Office of the Governor received a federal Exchange Planning grant of approximately $1 million in 2010. In February 2012, the state received a Level One Establishment grant for $17.9 million to build the operational staff and consulting support necessary to progress on key design requirements of the Marketplace. In September 2012, Colorado received a second Level One grant of $43.5 million to support technology development, specifically in order to meet deadlines for certification, testing, and deployment of systems and operations. In July 2013, Colorado received a Level Two Establishment grant for $116.2 million to support technology enhancement, develop the consumer center and education campaign, design a quality improvement program, and fund the Connect for Health Assistance Network.¹⁸ 

Colorado, along with nine other states, is receiving technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network; this assistance includes help with setting up health insurance Marketplaces, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions.¹⁹ 

Next Steps

On December 7, 2012, Colorado received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a State-based Marketplace.²⁰  The Connect for Health Colorado portal became operational on October 1 and began enrolling qualified individuals, families, and small businesses into coverage.

Additional information about Connect for Health Colorado can be found at http://www.connectforhealthco.com/

1. SB11-200 establishing Colorado’s Health Benefit Exchange  ↩︎
2. Colorado Geographical Rating Areas. Colorado Division of Insurance. ↩︎
3. Dental Insurance Carriers/Plans Approved by Colorado Division of Insurance for 2014. ↩︎
4. Risk Adjustment. Colorado Division of Insurance. Wakely. Consulting. June 25, 2012.  ↩︎
5. “Colorado Launches $2M Ad Campaign For New Online Marketplace.” May 8, 2013. ↩︎
6. Connect for Health Colorado Board Meeting Minutes. September 23, 2013.  ↩︎
7. Colorado Health Benefit Exchange. Connect for Health Assistance Network Funding Opportunity Announcement and Application Guidelines. February 22, 2013.  ↩︎
8. Connect for Health Coloardo. Update on Assistance Network Grantees. July 2013.  ↩︎
9. Connect for Health Colorado. Agents and Brokers. ↩︎
10. Update for Legislative Health Benefit Exchange Implementation Review Committee. September 5, 2013.  ↩︎
11. COHBE. Customer Service Center. August 27, 2012.  ↩︎
12. COHBE. Completed Policies and Processes. As of November 19, 2012.  ↩︎
13. COHBE. Employer and Employee Choice Policy. July 23, 2012.  ↩︎
14. COHBE Board Policy Decisions as of April 8, 2013.  ↩︎
15. Connect for Health Colorado. Board Meeting Minutes. June 10, 2013. http://www.connectforhealthco.com/?wpfb_dl=786 ↩︎
16. Connect for Health Colorado House Bill 13-1245 Fact Sheet. May 2013.  ↩︎
17. Draft recommendation for Stakeholder Input. August 31, 2012.  ↩︎
18. Colorado Affordable Insurance Exchange Grants Awards List.  ↩︎
19. Robert Wood Johnson Foundation. ‘RWJF Seeks Coverage of 95 Percent of All Americans by 2020.’ May 6, 2011.   ↩︎
20. Letter from HHS to Governor Hickenlooper. Decmeber 7, 2012.   ↩︎

Final update made on December 4, 2012 (no further updates will be made) 

Establishing the Exchange

On July 17, 2012, Governor Sean Parnell (R) announced that Alaska will not create a state-run health insurance exchange, and instead will allow the federal government to operate an exchange in the state.¹ While a bill establishing an exchange was introduced in the 2011 legislative session and reconsidered in 2012, it failed to pass.

Prior to the announcement that the state would not operate its own exchange, Governor Parnell openly opposed exchange legislation and affirmed that if Alaska proceeded with developing a state-based exchange, it would use its own money.^2,3 As such, the Alaska Health and Social Services Department hired a subcontractor to conduct background research, complete an overview of state options, and conduct a financial analysis of the costs of an exchange. The final report released in June 2012 was cited by the Governor in his decision not to proceed with a state-exchange.⁴

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 Exchange, cover certain defined health benefits. Since Alaska has not put forward a recommendation, the state’s benchmark EHB plan will default to the largest small-group plan in the state, Blue Cross Blue Shield of Alaska- Alaska Heritage Select Envoy PPO.

Exchange Funding

Alaska is the only state that chose not to apply for the $1 million federal Exchange Planning grant. Instead, the state allocated $200,000 of its own funds for background research and analysis.⁵

Next Steps

The federal government will assume full responsibility for running a health insurance exchange in Alaska beginning in 2014.

1. Press Release. Office of Governor Sean Parnell. July 17, 2012. http://www.gov.state.ak.us/parnell/press-room/full-press-release.html?pr=61952. Bohrer, B. “State moving ahead with health exchange plan” Associated Press. September 1, 2011.http://ap.peninsulaclarion.com/pstories/state/ak/20110901/879792853.shtml3. Letter from Governor Parnell to Senator French. March 11, 2011:http://aksenate.org/27thpress/031411_Parnell_Letter_Exchanges.pdf4. State of Alaska Department of Health and Social services Health Insurance Exchange Planning. Final Report. June 21, 2012. http://hss.state.ak.us/pdf/AKHealthExchangeReport2012.pdf5. Feidt, Annie. ‘Alaska Takes Biggest Step Yet Toward Exchange.’ Kaiser Health News. February 14, 2012.http://www.kffhealthnews.org/Stories/2012/February/14/alaska-exchange.aspx

Final update made on July 12, 2013 (no further updates will be made)

Establishing the Exchange

On December 14, 2012, Governor Bob McDonnell (R) informed federal officials that Virginia would not continue to plan for a state-based health insurance exchange.¹ 

Prior to the decision, Governor McDonnell had signed HB 2434 into law declaring the state’s intent to establish a state-based health insurance exchange.²  The legislation was based on a recommendation by the Virginia Health Reform Initiative Advisory Council, housed within the Virginia Department of Health and Human Resources.³  HB 2434 required the Governor to submit recommendations regarding establishment of an exchange in Virginia for consideration during the 2012 session of the General Assembly and prohibited qualified health insurance plans offered through the exchange from covering abortions, except in cases of rape, incest, or life endangerment of the pregnant woman.

On November 25, 2011, the Advisory Council’s exchange recommendations were submitted to the General Assembly by the Governor.⁴  The Council voted in favor of establishing a state-based exchange as a quasi-governmental agency with a governing board.⁵  However, Governor McDonnell opposed passing the additional legislation needed for the establishment of a state-based exchange until after the Supreme Court ruled on the Affordable Care Act (ACA) in late June 2012.⁶  Numerous bills to establish a state-run health insurance exchange were introduced in the Virginia Legislature in 2012; however, all were tabled for the next legislative session.⁷  In the absence of establishment legislation, the Advisory Council temporarily suspended its meetings.

Contracting with Plans: On February 14, 2013, Governor McDonnell sent a letter to the Center for Consumer Information and Insurance Oversight (CCIIO) announcing the state’s intent to perform plan management activities despite not having entered into a state-federal partnership exchange.⁸  On March 21, 2013 Governor McDonnell approved legislation authorizing the State Corporation Commission (SCC) to perform plan management functions, including collecting and analyzing information on plan rates, benefits, and cost-sharing and ensuring continued plan compliance. The SCC was also granted the authority to manage consumer complaints, provide technical assistance, and decertify issuers. The legislation authorizes the Virginia Department of Health to assist in plan management functions.⁹  Premium rates will vary based on family composition, age, tobacco use, and geographic area.¹⁰  Virginia will have 12 geographic rating areas, determined by the federal default mechanism.¹¹ 

Consumer Assistance and Outreach: In April 2013, Governor McDonnell signed into law HB 2246 and SB 1261 to prohibit navigators from performing activities that would require an insurance agent license. Navigators must be selected in accordance with federal law and may not act as intermediaries between employers and insurers offering QHPs or dental plans through the Exchange. The SCC will monitor Navigator activities and submit findings to the Governor and the Senate and House Commerce and Labor Committees in November of 2014 and 2015.¹² 

Information Technology (IT): Virginia is focusing on a significant Medicaid IT system upgrade and has received approval from the Centers for Medicare and Medicaid Services (CMS) for an enhanced federal match. In May 2012, the state released a Request for Proposals soliciting subcontractors to streamline eligibility and enrollment for all existing social service benefits, including Medicaid, TANF, and food stamps. State officials envision eventual interoperability between the upgraded system and an exchange.

Essential Health Benefits (EHB): The ACA requires that all individual and small-group plans sold in a state, including those offered through the Exchange, 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. Drawing input from multiple stakeholders and various analyses, the Advisory Council recommended in June 2012 that a subcommittee be established to consider Anthem, the state’s small-group PPO as the state’s benchmark plan. The subcommittee recommended Anthem as the EHB benchmark plan and the Children’s Health Insurance Program (CHIP) dental benefit plan (Smiles for Children) as the pediatric dental supplemental plan.¹³ 

Exchange Funding

In September 2010, the Virginia State Department of Medical Assistance Services received a federal Exchange Planning grant of $1 million. The state planned to submit a Level One Establishment grant application in June 2012; however, the Governor announced in a letter to the Legislature in July, he decided not to submit the application.¹⁴  In February 2013, Virginia received a $4.3 million Level One Establishment grant to support plan management functions, including hiring IT consultants and engaging stakeholders. In July 2013, Virginia received a second Level One Establishment grant for $1.2 million to fund the actuarial analysis needed to support the certification, decertification, and recertification of QHPs and stand-alone dental plans.¹⁵ 

Virginia, along with nine other states, received technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network; this assistance includes help with setting up health insurance exchanges, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions.¹⁶ 

Next Steps

On March 29, 2013, Virginia received approval from CCIIO to perform plan management activities. The federal government will retain control over all other Exchange functions.¹⁷ 

More information about the Advisory Council’s health insurance exchange activities can be found at: http://www.hhr.virginia.gov/Initiatives/HealthReform/index.cfm

1. Governor McDonnell Letter to Secretary Sebelius. December 14, 2012.  ↩︎
2. HB2434. Virginia’s 2011 Health Benefit Exchange Act.  ↩︎
3. Report of the Virginia Health Reform Initiative Advisory Council. December 20, 2010.  ↩︎
4. Report Pursuant to House Bill 2434: Virginia Health Reform Initiative (VHRI) Advisory Council recommendations for a Health Benefit Exchange. Report of the Secretary of Health and Human Resources. November 25, 2011.  ↩︎
5. The Virginia Health Reform Initiative. Presentation to House Appropriations Committee. November 16, 2011. ↩︎
6. Martz, Michael. ‘McDonnell: If health insurance mandate stands, Va. should run exchange.’ Richmond Times-Dispatch. December 9, 2011. ↩︎
7. See: http://lis.virginia.gov/ ↩︎
8. Letter from Governor McDonnell to Gary Cohen. February 14, 2013.  ↩︎
9. SB 922 Health insurance; SCC< et al., to perform plan management functions, review of premium rates.  ↩︎
10. State Corporation Commission, Bureau of Insurance. Rules Governing Riling of Rates for Individual and Group Accident and Sickness Insurance. July 1, 2013.  ↩︎
11. Virginia Geographic Rating Areas Including State Specific Geographic Divisions. CCIIO.  ↩︎
12. HB 2246  and SB 1261 ↩︎
13. Dise, Monty. EHB Subcommittee Report to the Virginia Health Reform Initiative Advisory Council. June 13, 2012.  ↩︎
14. Salasky, Prue. “Gov. McDonnell tells GA members no special session necessary on health care.” Dailypress. July 10, 2012.  ↩︎
15. Virginia Affordable Insurance Exchange Grants Awards List. ↩︎
16. Robert Wood Johnson Foundation. ‘RWJF Seeks Coverage of 95 Percent of All Americans by 2020.’ May 6, 2011.   ↩︎
17. Letter from Gary Cohen to Governor McDonnell. March 29, 2013.  ↩︎

Final update made on April 19, 2013 (no further updates will be made) 

Establishing the Exchange

On September 26, 2012, Governor Dennis Daugaard (R) announced that South Dakota would not establish an exchange.¹However, the state intends to maintain regulatory authority over the health insurance market and perform the plan management function for the exchange.² The decision to have a federally-facilitated exchange was made after an inter-agency work group and a taskforce of stakeholders and legislators explored the possibility of establishing a state-based exchange.^3,4

On March 19, 2012, South Dakota enacted a law prohibiting plans in a state exchange from offering abortion coverage, except when it is necessary to preserve the life or health of the pregnant woman.⁵

Contracting with Plans: On March 11, 2013, Director of the Division of Insurance Merle Scheiber sent a letter to the Center for Consumer Information and Insurance Oversight (CCIIO) requesting to maintain control over plan management functions despite not having entered into a state-federal partnership exchange. The Division of Insurance (DOI) has the legal authority and operational capacity to oversee certification of Qualified Health Plans (QHPs). DOI will use the System for Electronic Rate and Form Filing (SERFF) to collect and analyze information on plan rates, covered benefits, and cost-sharing requirements. DOI will also ensure continued plan compliance, manage consumer complaints, and oversee decertification of issuers.⁶

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 Exchange, cover certain defined health benefits. In the fall of 2012, Governor Daugaard selected the Wellmark Blue Cross Blue Shield’s Blue Select plan to be the South Dakota’s EHB benchmark.⁷

Exchange Funding

The South Dakota Office of the Governor received a federal Exchange Planning grant of $1 million in 2010. In May 2012, the Division of Insurance was award a Level One Establishment grant of $5.9 million to further the state’s planning and design of an exchange, including creation of a risk adjustment and reinsurance plan, studying the effects of adverse selection, designing an outreach and education plan, and writing an RFP for a comprehensive IT development plan.⁸

Next Steps

On March 29, 2013, South Dakota received approval from CCIIO to perform plan management activities. The federal government will retain control over all other Exchange functions.⁹

1. Press release from the office of Governor Daugaard. “South Dakota Will Not Build Health Insurance Exchange.” September 26, 2012. http://news.sd.gov/newsitem.aspx?id=136072. Division of Insurance Newsletter, South Dakota Department of Labor and Regulation. Fall 2012.http://dlr.sd.gov/insurance/publications/newsletter_fall12.pdf3. South Dakota’s State Planning and Establishment Grant Project Report, Quarter 4. October 28, 2011.http://healthreform.sd.gov/documents/4thQuarterlyExchangePlanningGrantsReport_000.pdf4. South Dakota’s Health Insurance Exchange Task Force Subcommittee Listing. June 17, 2011.http://healthreform.sd.gov/reports/HIE%20Task%20Force%20Subcommittee%20Listing.pdf5. HB 1185. South Dakota’s 2012 act regarding coverage for abortions by plans in the exchange.http://legis.state.sd.us/sessions/2012/Bills/HB1185ENR.pdf6. Letter from Director Scheiber to Gary Cohen. March 11, 2013.7. Division of Insurance Newsletter, South Dakota Department of Labor and Regulation. Fall 2012.8. HealthCare.gov factsheet. “South Dakota Affordable Insurance Exchange Grants Awards List.” Accessed June 8, 2012. http://www.healthcare.gov/news/factsheets/2011/05/exchanges/sd.html9. Letter from Gary Cohen to Director Scheiber. March 29, 2013. http://cciio.cms.gov/Archive/Technical-Implementation-Letters/sd-pm-letter-03-29-2013.pdf

Final update made on May 21, 2013 (no further updates will be made) 

Establishing the Exchange

After making health system reform one of the state’s top policy priorities, Utah’s former Governor Jon Huntsman (R) signed legislation in 2008 (HB 133) and 2009 (HB 188) which directed the Office of Consumer Health Services to create the Utah Health Exchange.¹  Current Governor Gary Herbert (R) signed into law additional legislation amending provisions related to health system reform in 2010 (HB 294) and 2011 (HB 128); the latter reauthorized the Health System Reform Task Force to evaluate options for bringing the state’s already existing exchange into compliance with the Affordable Care Act (ACA).²  Additional health system reform legislation was introduced in February 2012 (HB 144).³  The Utah Exchange allows small employers to participate in a defined contribution arrangement and compare, select, and enroll in commercial health insurance online. In 2012, the Utah Exchange was renamed to Avenue H.

In early 2012, Governor Herbert stated Utah was in negotiations with the federal Department of Health and Human Services (HHS) regarding the extent to which the state would have to modify its existing health insurance exchange to meet new federal requirements under the Affordable Care Act (ACA). Although the state received conditional approval from HHS in January 2013 for a fully state-run exchange, Governor Herbert subsequently proposed that the state continue running Avenue H as the state’s SHOP exchange for small employers  while the federal government operate a federally-facilitated individual exchange in the state.⁴   HHS granted approval for this proposal in May 2013.⁵ 

In March 2011, Governor Herbert also signed HB 354 into law which bans abortion coverage in any private plan sold in the state, including the Exchange, except in cases of life endangerment or severe impairment of the pregnant woman, rape, incest, or fetal abnormality effective January 1, 2012.⁶ 

The following describes the structure and governance of Avenue H, the state’s SHOP exchange.

Structure: Avenue H is administered by the Office of Consumer Health Services, which is housed within the Governor’s Office of Economic Development.

Governance: The Office of Consumer Health Services runs Avenue H, and is responsible for ensuring performance and resolving policy issues. State law requires Avenue H to operate with input from two distinct boards: an Exchange Advisory Board and a Defined Contribution Risk Adjuster Board. HB 294 requires Avenue H to create an Advisory Board to counsel staff on the operation of the Exchange and transparency issues. An Exchange Advisory Board met monthly until June 2011, at which time it was replaced by an Executive Steering Committee. Consumer advocates have raised concerns over the lack of consumer representation on the Executive Steering Committee.⁷ 

Current Executive Steering Committee members are:

• Greg Bell (Co-Chair), Lt. Governor
• Greg Poulsen (Co-Chair), Intermountain Healthcare
• Richard Broadbent, Utah Association of Health Underwriters
• Marc Bennett, HealthInsight
• Rich McKeown, Salt Lake Chamber’s Health Committee & Leavitt Partners
• Gordon Crabtree, University of Utah
• Pam Gold, United HealthCare
• Pat Richards, SelectHealth
• Jennifer Cannaday, Regence BlueCross/BlueShield
• Howard Headlee, Utah Bankers Association
• David Patton, Department of Health
• Mark VanOrden, Department of Technology Services
• Spencer Eccles, Governor’s Office of Economic Development
• Colleen Mellor, Strategic Employee Benefit Services
• Todd Kiser, Department of Insurance
• Greg Matis, SelectHealth
• Vaughn Holbrook, Regence Blue Cross Blue Shield
• Ernie Sweat, Fringe Benefit Analysts
• Patty Conner, Avenue H, Office of Consumer Health Services
• Norm Thurston, Office of Consumer Health Services

Responsibility for managing the risk sharing mechanisms for Avenue H’s defined contribution market lies with the Utah Defined Contribution Risk Adjuster Board which meets monthly and is composed of up to nine members.⁸  The Governor appoints between five and seven members, including: three to five members who possess actuarial experience and represent insurers that participate in the defined contribution market in Utah and one to two of whom represent insurers that have a small percentage of lives in the defined contribution market; a representative of an individual employee or employer; and a representative of the Office of Consumer Health Services. The Director of the Public Employees’ Benefit and Insurance Program appoints one member with actuarial experience to represent that program. The Insurance Commissioner (or designee) is the final member and can only vote in the event of a tie.

Current Risk Adjuster Board members are:

• Jim Pinkerton (Chair), Regence Blue Cross Blue Shield of Utah
• John Borer, Public Employees’ Benefit and Insurance Program
• Dave Jackson, First West Benefit Solutions
• Jim Murray, SelectHealth
• Kim Miller, United Health Care
• Norman Thurston, Office of Consumer Health Services
• Tomasz Serbinowski, Utah Insurance Department

Contracting with Plans: Per Utah’s agreement with HHS, the state will maintain oversight of Qualified Health Plans (QHPs) participating in the state’s individual exchange operated by HHS, as well as those participating in Avenue H. On March 28, 2013, the Utah Insurance Department (UID) issued a bulletin providing information on the filing requirements for plans issued or renewing on or after January 1, 2014, as well as the timeline for the QHP approval process.⁹ 

Avenue H acts as a market clearinghouse and accepts all insurers meeting minimum standards. HB 128 gives the Insurance Department authority to conduct rate reviews to verify that insurers price plans similarly within and outside of the Exchange. There are currently over 140 plans offered through Avenue H with varying prices, copays and deductible levels. Brokers play an integral role in assisting small employers with selecting plans.

Consumer Assistance and Outreach: By May 2013, 344 employer groups were enrolled in Avenue H with over 8,000 covered lives.¹⁰  To increase enrollment, the state is undertaking initiatives to enhance the consumer experience, including improving the user interface and providing education and decision support to consumers.

As part of its agreement to operate Avenue H as the SHOP exchange, the state must run a SHOP-specific Navigator program and fund a minimum of two Navigators.  The state has the option of limiting the role of the SHOP-specific Navigators to consumer outreach and education functions only. HHS will finance and run a Navigator program in the individual exchange.

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 Exchange, 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. The Health System Reform Task Force collected public comments on EHB and in mid-August 2012 voted to recommend the Public Employee Health Plan’s Utah Basic Plus as the benchmark.¹¹  The Utah Insurance Department issued a final rule, effective October 25, 2012, designating this plan as the state’s EHB benchmark plan.¹² 

Information Technology (IT): The state already has in place the technology backbone necessary to support Avenue H. Now that the state will not be operating the individual exchange, it will need to develop an interface between the state’s public programs and the federal exchange. Prior to the recent developments, in July 2012, subcontractors completed two reports on exchange design and functionality.¹³ 

Financing: Avenue H began with an initial appropriation of $600,000 and ongoing funding is through annual appropriation and monthly fees assessed on every subscriber. Avenue H also receives support from the Governor’s Office of Economic Development for the Exchange’s staff members.

Exchange Funding

In September 2010, the Governor’s Office of Economic Development was awarded a $1 million federal Exchange Planning grant.

Next Steps

On May 10, 2013, Utah received approval to operate Avenue H as the state’s SHOP exchange and to perform plan management functions in the federally-facilitated individual exchange.¹⁴  The federal government will perform all other functions for the individual exchange.

For more information about Utah’s existing health insurance exchange, Avenue H, visit: http://www.avenueh.com/

1. House Bill 133. Health System Reform. 2008 General Session.  House Bill 188. Health System Reform- Insurance Market. 2009 General Session.  ↩︎
2. House Bill 294. Health System Reform Amendments. 2010 General Session. House Bill 128. Health Reform Amendments. 2011 General Session.  ↩︎
3. House Bill 144. Health System Reform Amendments. 2012 General Session. Introduced February 3, 2012.  ↩︎
4. HHS letter to Governor Herbert, January 3, 2013.  ↩︎
5. HHS letter to Governor Herbert, May 10, 2013.  ↩︎
6. House Bill 354. Insurance Amendments Relating to Abortion. 2011 General Session. Enrolled Copy.  ↩︎
7. Utah Health System Reform Task Force Meeting Minutes. October 19, 2011. See also: Utah Health Policy Project.   ↩︎
8. Utah Code: Title 31A, Chapter 42, Section 201. Defined Contribution Risk Adjuster Act.  Utah Defined Contribution Risk Adjuster Plan of Operation. As of October 26, 2010.   ↩︎
9. Utah Insurance Department, Bulletin 2013-4 Health Benefit Plan Market Transition, March 28, 2103.  ↩︎
10. Avenue H May 2013 Dashboard.  ↩︎
11. Essential Health Benefits Recommendation. Health System Reform Taskforce. August 16, 2012.  ↩︎
12. Utah Insurance Department, R590, Utah Essential Health Benefits Package final rule.  ↩︎
13. Final Report for Solicitation PR11072. Utah Health Exchange Planning Grant. July 12, 2011. PlanSource.  Seamless Interface with Public Program Eligibility. Utah Health Exchange- Phase 1 Activity. July 12, 2011.  ↩︎
14. HHS letter to Governor Herbert, May 10, 2013.  ↩︎

Final update made on December 4, 2012 (no further updates will be made)

Establishing the Exchange 

On November 28, 2012, Governor Jan Brewer (R) informed federal officials that Arizona would default to a federally-facilitated health insurance exchange.¹

Prior to her decision to default, the Governor had established the Office of Health Insurance Exchange to “organize the health insurance marketplace for easier evaluation by individuals and small businesses to acquire affordable health insurance.”² While legislation establishing a state-run health insurance exchange failed in 2011, the Governor’s Office and legal counsel had researched non-legislative options for establishing an exchange.^3,4

The Arizona Health Insurance Exchange Steering Committee was established to coordinate exchange planning activities across state agencies and met regularly. Members included Directors and senior staff from the Office of Health Insurance Exchange, the Department of Insurance, the Arizona Health Care Cost Containment System, the Department of Economic Security, the Department of Health Services, and the Director of Health Care Innovation Infrastructure Management. Stakeholder feedback was gathered through five work groups including, a health plans work group led by the Department of Insurance and focused on plan management requirements; a health brokers and agents group, concentrating on broker licensing and compensation; a tribal work group, which was developing outreach and education plans; an information technology infrastructure work group led by the Arizona Health Care Cost Containment System; and a legislative work group.⁵

On April 24, 2010, Arizona enacted a law prohibiting plans in a state exchange from offering abortion coverage except in cases of life endangerment or severe health impairment of the pregnant woman.⁶

Contracting with Plans: Prior to defaulting to a federal exchange, the Department of Insurance took the lead in researching and developing the plan management functions for the exchange, including certification of qualified health plans, quality rating systems, risk adjustment and transitional reinsurance. Their work was informed by the health plans work group meetings. Arizona expressed support for adopting a market facilitator approach, whereby the exchange would contract with all qualified health plans meeting certain criteria.^7,8 In February 2012, the state released a Request for Proposals soliciting subcontractor assistance with exchange management functions including, plan management, plan selection, data management and reporting, consumer support services, and financial management.⁹

Information Technology (IT): Arizona had planned to design and build the individual and small business exchange components, upgrade its Medicaid eligibility systems, and integrate everything into one seamless system. Arizona submitted an Advanced Planning Document which was accepted by CMS, indicating the state intends to make major Medicaid eligibility systems upgrades. In 2011, the state released a Request for Information to identify viable available or proposed solutions for aligning its Medicaid and Children’s Health Insurance Program (CHIP) enrollment and eligibility systems with an exchange as well as estimated pricing.¹⁰ Arizona also participated in the “Enroll UX 2014” project, which is a public-private partnership creating design standards for exchanges that all states can use.¹¹

Essential Health Benefits (EHB): The Affordable Care Act requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. The Department of Insurance examined the state’s EHB options and solicited subcontractors to complete an analysis on options for the final benchmark plan.¹² The state selected the State Employee Benefit- United Healthcare EPO with pediatric and vision coverage supplemented by the FEDVIP plans as the benchmark package.¹³

Exchange Funding

In September 2010, the Arizona Governor’s Office of Economic Recovery received a federal Exchange Planning grant of $1 million. In November 2011, the Governor’s Office was awarded a $29.8 million Level One Establishment grant to further secure IT infrastructure and assist in finalizing plan management functions for the exchange.¹⁴

Next Steps

The federal government will assume full responsibility for running a health insurance exchange in Arizona beginning in 2014.

For more information on Arizona’s health insurance exchange planning, visit:http://www.azgovernor.gov/hix/

1. Governor Jan Brewer letter to CCIIO. November 28, 2012.http://azgovernor.gov/dms/upload/PR_112812_CohenLetter.pdf2. Office of Health Insurance Exchange: http://www.azgovernor.gov/hix/index.asp (Accessed February 16, 2012)3. House Bill 2783. Arizona Health Insurance Exchange. Introduced February 8, 2012.http://www.azleg.gov/legtext/50leg/2r/bills/hb2783p.pdf4. Arizona Exchange Planning Grant Final Report. January 5, 2012.http://www.azgovernor.gov/hix/documents/QuickLinks/ExchangePlanningGrantReportFinal.pdf5. Arizona Exchange Planning Grant 4th Quarterly Report. October 15, 2011.http://www.azgovernor.gov/hix/documents/QuickLinks/ExchangePlanningGrantReportQ4.pdf6. Senate Bill 1305. April 24, 2010. http://www.azleg.gov/legtext/49leg/2r/bills/sb1305h.pdf7. Health Insurance Exchange and ACA Update. August 23, 2012. Arizona Health Care Cost Containment System. http://www.azdhs.gov/diro/documents/forums/2012/health-insurance-exchange-affordable-care-act.pdf8. Arizona’s Options related to risk adjustment, transitional reinsurance and risk corridors (ACA requirements). Arizona Department of Insurance. April 12, 2012. Mercer.http://www.azgovernor.gov/hix/documents/Grants/AZOptionsRiskAdjTransReinsuranceRiskCorr.pdf9. State of Arizona Health Insurance Exchange. Notice of Request for Proposal. February 2, 2012.http://www.azahcccs.gov/commercial/Downloads/Solicitations/YH12_0023/AZ_HIX_RFPSoliticationNoYH12-0023.pdf10. Request For Information Health Insurance Exchange Commercial Component/Interface. Issued 8/15/2011. http://www.azahcccs.gov/commercial/Downloads/Solicitations/Open/RFIs/YH12-0013/YH12-0013.pdf11. Enroll America, UX 2014. http://www.ux2014.org/12. Essential Health Benefits. Arizona Department of Insurance. June 1, 2012. Mercer.http://www.azgovernor.gov/hix/documents/Grants/EHBReport.pdf13. State of Arizona. Letter to CCIIO from Jan Brewer. September 28, 2012.http://www.statereforum.org/sites/default/files/az_letter_to_hhs_9-28-12.pdf14. Level One Establishment grant application. State of Arizona Governor’s Office. September 30, 2011.http://www.azgovernor.gov/hix/documents/Grants/L1EstGrantApp_SubmittedNOTApproved.pdf

Final update made on December 10, 2012 (no further updates will be made)

Establishing the Exchange

On November 15, 2012, Governor Nikki Haley (R) informed federal officials South Carolina would default to a federally-operated health insurance exchange.¹ This decision was largely based on findings from the South Carolina Health Planning Committee which had concluded the state cannot implement a state-based exchange as required by the Affordable Care Act (ACA) and should instead encourage the establishment of private exchanges.² The Governor created the Committee via Executive Order to assist with policy recommendations regarding whether and how South Carolina should establish a health insurance exchange; however, her influence over the Committee’s findings was called into question in December 2011.^3,4Prior to the announcement that the state would not operate its own exchange, the Governor signed into law S 0102, a bill prohibiting plans in a state exchange from offering abortion coverage, except in cases of rape, incest, or to avert the death of a pregnant woman.⁵

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 Exchange, cover certain defined health benefits. Since South Carolina has not put forward a recommendation, the state’s benchmark EHB plan will default to the largest small-group plan in the state, Blue Cross Blue Shield of South Carolina- Business Blue Complete, PPO.

Exchange Funding

In September 2011, the South Carolina Department of Insurance received a federal Exchange Planning grant of $1 million. Governor Haley stated South Carolina would not pursue any more federal grant money to fund a possible state-run exchange.⁶

Next Steps

The federal government will assume full responsibility for running a health insurance exchange in South Carolina in 2014.

1. Letter from Governor Haley toHHS. November 15, 2012.http://governor.sc.gov/Documents/Gov%20Nikki%20Haley%20Letter%20to%20HHS%20Secretary.pdf2. “Improving the Health Care Marketplace in South Carolina: Strategies and Policies Recommended by the South Carolina Health Planning Committee.” November 2011.http://doi.sc.gov/Documents/ACA%20Grants/SCHPCFinalReport.pdf3. Executive Order 2011-09: http://www.scstatehouse.gov/reports/executiveorders/exor1109.htm4.  ‘Harkin Blasts South Carolina Over Exchange’. December 23, 2011. Kaiser Health News.http://www.kffhealthnews.org/daily-reports/2011/december/23/south-carolina-exchange-grant.aspx5. S 0102. 2012 Legislative session. Signed June 7, 2012.http://www.scstatehouse.gov/sess119_2011-2012/bills/102.htm6. Largen, Stephen. ‘Haley to shun federal funds.’ Go Upstate. July 1, 2011.http://www.goupstate.com/article/20110701/ARTICLES/110709990

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.⁸ 

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.⁹  The state issued a Request for Proposals in early September for kynector organizations in the remaining three regions,¹⁰  and in November awarded a total of $2.15 million to three grantees.¹¹   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.¹²  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.¹³  The KHBE has also established partnerships with local agencies, such as the Department for Public Health, to assist in education and outreach activities.¹⁴ 

In April 2013, Kentucky procured a subcontractor to design, implement, and maintain a contact center.¹⁵  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.¹⁶ 

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. ¹⁷ 

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.¹⁸ 

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.¹⁹ 

Marketplace Funding

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.²⁰ 

Next Steps

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.²¹  The kynect Marketplace portal became operational on October 1 and began enrolling qualified individuals, families, and small businesses into coverage.

For more information on kynect, visit: http://healthbenefitexchange.ky.gov/ and https://kyenroll.ky.gov/.

1. Executive Order 587. July 17, 2012.  ↩︎
2. Exchange Planning Grant Third Quarterly Report. Submitted September 1, 2011.  ↩︎
3. Office of Health Policy. Stakeholder Perspectives on Health Benefit Exchanges. Kentucky Cabinet for Health and Family Services, June 2012.  ↩︎
4. “Gov Beshear Appoints Members to Health Exchange Board.” September 18, 2012. Governor Beshear’s Communications Office.   ↩︎
5. ‘Beshear Issues Executive Order Creating Kentucky Health Benefit Exchange.’ July 17, 2012. Lex18.com.   ↩︎
6. See Kentucky Health Benefit Exchange Subcommittees.  ↩︎
7. 900 KAR 10:010E. Exchange Participation Requirements and Certification of Qualified Health Plans and Qualified Dental Plans. May 13, 2013.  ↩︎
8. 900 KAR 10:010E. Exchange Participation Requirements and Certification of Qualified Health Plans and Qualified Dental Plans. May 13, 2013.  ↩︎
9. Kentucky Cabinet for Health and Family Services. “Cabinet Awards kynector Grants.” August 20, 2013. ↩︎
10. Kentucky Health Benefit Exchange. “kynector/In-Person Assister Program Request for Proposal (RFP) has been issued.” September 5, 2013.  ↩︎
11. “Additional funding awarded for contractors to help with health care coverage.” November 2, 2013.  ↩︎
12. 900 KAR 10:050E. Individual Agent or Business Entity Participation with the Kentucky Health Benefit Exchange. July 3, 2013.  ↩︎
13. “In glare of spotlight, Kentucky’s Obamacare program is ready, experts say.” September 28, 2013. ↩︎
14. Kentucky Cabinet for Health and Family Services. “Cabinet Awards kynector Grants.” August 20, 2013. ↩︎
15. Kentucky Health Benefit Exchange Advisory Board Navigator/Agent Subcommittee Meeting Minutes. April 18, 2013.  ↩︎
16. “Gov. Beshear celebrates opening of kynect customer service center in Lexington.” August 16, 2013.  ↩︎
17. 900 KAR 10:020. Kentucky Health Benefit Exchange Small Business Health Options Program. September 12, 2013.  ↩︎
18. Kentucky Health Benefit Exchange Advisory Board Meeting Minutes. December 20, 2012.  ↩︎
19. Kentucky Department of Insurance Statement on Recommendation for Benchmark Plan. October 1, 2012.  ↩︎
20. Kentucky Affordable Insurance Exchange Grants Awards List.  ↩︎
21. Letter from HHS to Governor Beshear. December 14, 2012.  ↩︎

Final update made on December 11, 2012 (no further updates will be made)

Establishing the Exchange 

On November 16, 2012, Governor Scott Walker (R) notified federal officials that Wisconsin would default to a federally-facilitated health insurance exchange.¹ After initial efforts to develop a state-based health insurance exchange, Governor Walker announced in July 2012, he would not take any action to implement federal health reform until after the November elections.²

In 2011, Walker had issued an executive order to create the Office of Free Market Health Care to develop a plan for a Wisconsin health benefit exchange; however, almost a year later he closed the Office.^3,4 Exchange establishment legislation failed to pass at the end of the 2012 legislative session. Prior to closing, the Office of Free Market Health Care had been seeking subcontractor assistance with the state’s marketing and outreach strategy and had completed actuarial and economic analyses to determine next steps in designing an exchange.⁵

Under former-Governor Jim Doyle (D), Wisconsin’s Department of Health Services had investigated the information technology necessary for a state-run exchange and based on insight from over 40 healthcare stakeholders, created an exchange prototype to simulate eligibility determinations and the consumer enrollment process. The prototype was launched in December 2010, with much of the functionality required of an exchange website.

On April 5, 2012, Governor Walker signed into law SB 92, a bill prohibiting plans in a state exchange from offering abortion coverage, except in cases of rape, incest, or to avert severe physical impairment or death of the pregnant woman.⁶

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 Exchange, cover certain defined health benefits. Since Wisconsin has not put forward a recommendation, the state’s benchmark EHB plan will default to the largest small-group plan in the state, United- Choice Plus, POS.

Exchange Funding

The Wisconsin Department of Health Services received a federal Exchange Planning grant of $1 million in September 2010 and a federal Early Innovator grant of $37.7 million in February. Wisconsin planned to use the Early Innovator grant to refine their exchange prototype into a single portal through which residents could access subsidized and non-subsidized health care and other state-based programs.⁷ In January 2012, the Governor announced the state would be returning the Early Innovator grant funding.⁸

Next Steps

The federal government will assume full responsibility for running a health insurance exchange in Wisconsin beginning in 2014.

1. Scott Walker Office of the Governor. Letter to Secretary Sebelius. November 16, 2012.http://www.walker.wi.gov/Documents/11.16.12%20Letter%20to%20Secretary%20Sebelius.pdf2. Governor Scott Walker. Governor Walker’s Reaction to the US Supreme Court Ruling on ObamaCare, June 28, 2012. http://www.wisgov.state.wi.us/Default.aspx?Page=8533b724-db36-4bce-9b24-3b408bfe3206.3. Wisconsin Executive Order #10. January 27, 2011. http://www.wisgov.state.wi.us/journal_media_detail.asp?locid=177&prid=56494. Wisconsin Executive Order #57:http://docs.legis.wisconsin.gov/code/executive_orders/2011_scott_walker/2012-575. Office of Free Market Health Care. Office of Free Market Health Care Releases Report on Impacts of Patient Protection and Affordable Care Act (PPACA), August, 24,2011.http://www.iiaw.com/index.php?module=cms&folder=16&cmd=cmsproxy&filename=files/0824freemarket.pdf6. SB 92. 2012 Legislative session. Enacted April 5, 2012.http://docs.legis.wisconsin.gov/2011/related/acts/2187. Early Innovator Grant Awards. HHS announcement. February 16, 2011.http://www.healthcare.gov/news/factsheets/exchanges02162011a.html (Accessed August 23, 2011)8. Office of the Governor Press Release. “Governor Walker Turns Down Obamacare Funding.” January 18, 2012. http://165.189.60.210/Default.aspx?Page=84c6be7e-6bf7-47bb-949a-7330dd644579

Final update made on February 12, 2013 (no further updates will be made) 

Establishing the Exchange

On November 15, 2012, Governor Beverly Perdue (D) declared the state’s intent to establish a state-federal partnership health insurance exchange.¹ However, on February 12, 2013, newly-elected Governor Pat McCrory (R) issued a statement indicating that North Carolina will abandon efforts to establish a partnership exchange and will instead allow the federal government to operate the exchange.²

In 2011, Governor Perdue had signed into law HB 22 which indicated the General Assembly’s intent to establish and operate a state based health insurance exchange.³ Legislators introduced three bills to establish a state-based health insurance exchange in 2011; however, all failed at the close of the legislative session in July 2012.

In the absence of exchange legislation, the North Carolina Department of Insurance (NCDOI), the North Carolina Department of Health and Human Services (NCDHHS), and the North Carolina Institute of Medicine (NCIOM) led exchange planning in the state. As of January 2012, the Department of Insurance leads a Market Reform Technical Advisory Group (TAG) comprised of insurers, agents, consumers, and providers. The NCIOM Health Benefit Exchange and Insurance Oversight Workgroup released a final report in May 2012 on the impact of federal reform on the state.⁴

Contracting with Plans: In September 2012, the North Carolina Department of Insurance issued a Request for Proposals to solicit work on exchange plan management activities including, technical assistance and training; the Department intends for the contract to begin in October 2012.⁵ In the spring of 2012, the Department of Insurance’s TAG recommended that North Carolina initially defer to the federal risk adjustment model, but evaluate developing a state model in the future.⁶The TAG also suggested the state administer the reinsurance program, while deferring the responsibility of collecting contributions to the federal government. In April 2012, the NCIOM Workgroup explored the exchange’s authority to limit the number of plan designs per metal level in 2014.

Consumer Assistance and Outreach: In April 2012, the NCIOM Workgroup identified outstanding issues including, conflict of interest provisions for agents and brokers as well as patient Navigators.⁷ The Workgroup created a subcommittee to consider the role of Navigators in educating the public and helping them enroll in appropriate coverage.

North Carolina used federal funds to establish a pilot call center that became operational in August 2012. The call center fielded almost 3,000 calls in September and October about various issues, including assistance with enrolling in a health plan and questions about the Affordable Care Act. The call center collects data by county so that concerns can be identified by geographic regions to inform future consumer assistance efforts. The call center hired a Community Resource Manager in October 2012 to work with Navigators and Assisters.

Small Business Health Options Program (SHOP) Exchange: In March 2011, a subcontractor for the Department of Insurance released a report including insurance market analysis of the impact of health reform on enrollment and premiums, the impact of merging the individual and small group health markets, the impact of allowing large groups to participate in the exchange beginning in 2014, and recommended strategies to mitigate adverse selection.⁸ A year later, the Insurance Department’s TAG recommended that the small group and individual exchange markets maintain separate risk pools and only employers with 50 or fewer employees be allowed participate in the SHOP until the state is required to open the SHOP to employers with 100 or fewer employees in 2016.⁹

Information Technology (IT): In December 2008, North Carolina hired a contractor to provide a commercial off-the-shelf (COTS) software package that replaced its existing eligibility determination and case management system. The new system, called North Carolina Families Accessing Services Through Technology (NC FAST), currently provides electronic Medicaid/CHIP application, eligibility, and enrollment functionality. North Carolina plans to expand upon the existing system to develop a multiple-service eligibility system to include the Exchange and other public programs.

NCDOI had used federal funding to hire contractors to develop a RFP for all non-eligibility related Exchange systems, including financial management, plan selection functionality, plan management, Navigator/assister management, call center operations, data warehousing, and SHOP eligibility. These services will be required to be interoperable with NC FAST for both Exchange and Medicaid/CHIP functions.¹⁰

Essential Health Benefits (EHB): The Affordable Care Act requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, 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. The Department of Insurance released an analysis of benchmark plan options for the state in May 2012; the report found that all of the state’s options except for the federal employee health benefit plan covered all state mandates, there was relatively little difference in the cost among benchmark plans, and all benchmark options needed to be supplemented for pediatric oral and vision care.¹¹Therefore, the state was comfortable with defaulting to the largest small-group plan, Blue Cross Blue Shield of North Carolina- Blue Options, PPO.

Exchange Funding

In September 2011, the North Carolina Department of Insurance received a federal Exchange Planning grant of $1 million. The Department, working in partnership with the North Carolina Department of Health and Human Services, then received a $12.4 million federal Level One Establishment grant on August 12, 2011. North Carolina will use the grant to engage stakeholders, prepare analyses of outstanding policy decisions, and expand the existing eligibility system of the North Carolina Department of Health and Human Services to accommodate the exchange. In January 2013, North Carolina was awarded a second Level One grant of $74 million to develop an IPA program and support implementation of the HCR Module, including integration of the module with current state IT systems and federal data sources.¹²

Next Steps

The federal government will assume full responsibility for running a health insurance exchange in North Carolina in 2014.

Additional information about North Carolina’s exchange Workgroup meetings can be found at:http://www.nciom.org/task-forces-and-projects/?hr-hbeandinsurance

More information on the state’s exchange planning can also be found at:http://www.ncdoi.com/lh/LH_Health_Care_Reform_ACA.aspx

1. “Gov Perdue chooses state-federal partnership.” The News-Herald. November 16, 2012.http://www.roanoke-chowannewsherald.com/2012/11/16/gov-perdue-chooses-state-federal-partnership/2. “Governor McCrory Recommends Healthcare Implemenation Strategy.” State of North Carolina Governor’s Office. February 12, 2013. http://www.governor.state.nc.us/newsroom/press-releases/20130212/governor-mccrory-recommends-healthcare-implementation-strategy3. House Bill 22. “An Act to Make Technical, Clarifying, and other Modifications to the Current Operations and Capital Improvements Appropriations Act.” Session Law 2011-391.http://www.ncga.state.nc.us/Sessions/2011/Bills/House/PDF/H22v4.pdf4. Examining the Impact of the Patient Protection and Affordable Care Act in North Carolina. Draft Final Report Pending US Supreme Court Decision. May 2012. North Carolina Institute of Medicine.http://www.nciom.org/wp-content/uploads/2012/05/Full-Report-Online-Pending.pdf5. North Carolina Health Insurance Rate Review and Health Benefit Exchange Plan Management Projects. Request for Proposals Issued September 5, 2012. NC Dept. of Insurance.https://www.ips.state.nc.us/ips/AGENCY/PDF/09194300.pdf6. Risk Adjustment and Reinsurance Issues and Recommendations from the Market Reform Technical Advisory Group. Issue Brief #3. Department of Insurance. Spring 2012.http://www.ncdoi.com/lh/Documents/HealthCareReform/ACA/Issue%20Brief%203%20-%20Risk%20Adjustment%20and%20Reinsurance%20Issues.pdf7. HBE Workgroup: Outstanding Discussion Questions. April 13, 2012. North Carolina Institute of Medicine. http://www.nciom.org/wp-content/uploads/2012/04/Outstanding-Discussion-Questions.pdf8. Milliman Report for the North Carolina DOI. March 31, 2011. http://www.nciom.org/wp-content/uploads/2010/12/Health-Benefits-Exchange-Study-DRAFT-4-2011-03-31-FULL-REPORT.pdf9. Selected Small Group Market Issues and Recommendations from the Market Reform Technical Advisory Group. Issue Brief #1. Department of Insurance. Spring 2012.http://www.ncdoi.com/lh/Documents/HealthCareReform/ACA/Issue%20Brief%201%20-%20Small%20Group%20Issues.pdf10. North Carolina Exchange Establishment Level I: Project Narrative. North Carolina Department of Insurance. December 19, 2012.http://www.ncdoi.com/Smart/Documents/November%202012%20Level%20One%20Exchange%20Establishment%20Cooperative%20Agreement%20Application.pdf11. Analysis of Benchmark Plan Options for the Essential health Benefits Package in North Carolina. Prepared for the Dept. of Insurance. May 14, 2012. Oliver Wyman and Manatt Health Solutions.http://www.ncdoi.com/lh/Documents/HealthCareReform/Analysis%20of%20Benchmark%20Plan%20Options%20Study%20Report.pdf12. North Carolina Affordable Insurance Exchange Grants Awards Listhttp://cciio.cms.gov/archive/grants/states-exchanges/nc.html