Health Insurance Exchanges: Multi-state Plans

Beginning in 2014, the Affordable Care Act (ACA) requires online competitive marketplaces, or Exchanges, to be available in each state for individuals and small businesses to purchase health insurance coverage. The first open enrollment period for plans offered through the Exchanges began on Oct. 1, 2013, for coverage starting on Jan. 1, 2014.

Additionally, the ACA authorizes the multi-state plan program under the Exchanges so that families and small businesses that are spread out over more than one state will be able to select a health plan from the same health insurance issuer. Coverage offered through the multi-state program may be phased in over a period of four years, with coverage available in all states by 2017.

MULTI-STATE PLANS

A multi-state plan is a private health insurance plan that will be offered across state lines under the Exchanges. Multi-state plans will be administered by the Office of Personnel Management (OPM) and will be offered in all 50 states and the District of Columbia. The ACA requires the OPM to contract with at least two private health insurance issuers, one of which must be a nonprofit, to offer individual and small group coverage through multi-state plans on the Exchanges. On March 11, 2013, the OPM issued a final rule to implement standards for the multi-state plan program.

Multi-state plans will offer a uniform benefits package in all states. The final rule specifies that the benefits package provided under multi-state plans must be substantially equal to either the essential health benefits (EHB) benchmark plan in each state in which it operates or any EHB-benchmark plan selected by OPM. The OPM-selected EHB-benchmark plans are the three largest Federal Employees Health Benefits Program (FEHBP) plan options, with certain benefit supplements.

In addition, the final rule requires multi-state plan issuers to offer at least one plan at the silver level of coverage and at least one plan at the gold level of coverage. Coverage at the bronze or platinum levels is optional. Child-only coverage must be offered at each coverage level available under the multi-state plan. Also, multi-state plan issuers must ensure that the provider network of each of its plans meets certain standards, including that the network is sufficient in the number and types of providers to ensure that all services will be accessible to enrollees without unreasonable delay.

Multi-state plans must also comply with the ACA's cost-sharing limits and, in order to maintain a level playing field, issuers of multi-state plans must comply with specified ACA requirements, including guaranteed renewal, community rating, preexisting conditions and nondiscrimination. However, multi-state plans are not subject to the Exchanges' certification process for qualified health plans (QHPs) because they are deemed to meet QHP certification standards.

Enrollees in multi-state plans may be eligible for the ACA's premium tax subsidy and cost-sharing subsidy. Multi-state plans must ensure that qualified individuals receive advance payments of these subsidies.

TIMELINE AND STATUS

An issuer may phase in its multi-state plan coverage over four years, providing coverage in all states by 2017. Thus, a multi-state plan may not be available in every state until 2017. For 2014, issuers must offer the multi-state plan in at least 60 percent of the states. This percentage goes up to 70 percent for 2015, 85 percent for 2016 and 100 percent for 2017.

According to an OPM Fact Sheet, the OPM has entered into a contract with the Blue Cross and Blue Shield Association to offer more than 150 multi-state plan options in 30 states and the District of Columbia. Without the multi-state plan option, in three states (Alaska, New Hampshire and West Virginia) there would only be one type of insurance plan for Exchange consumers to consider. Additionally, multi-state plan options will be offered in 10 federally-facilitated Exchanges (FFEs) where there are five or fewer issuers offering QHPs.

The final rule requires multi-state plan issuers to provide coverage under the Small Business Health Options Program (SHOP) if they are required to do so by either state law in states with their own Exchanges or under the rules for the FFE. The FFE rules only require multi-state plan issuers to offer SHOP coverage if they or an affiliate has at least a 20 percent small group market share. A multi-state plan issuer must offer individual and small group coverage for states with merged markets. The rule also gives the OPM discretion to allow the phase-in of SHOP coverage.

This Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

© 2013 Zywave, Inc. All rights reserved. EM 11/13

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