It's been too long since my last post on the federal Patient Protection and Affordable Care Act, so let's jump right in to Section 1334, Multi-State Plans.
The federal Office of Personnel Management must contract with health insurance carriers to offer at least two multi-state qualified health plans through each exchange in each state. OPM can do this without going through the competitive bidding process. These plans will provide individual and/or small group coverage. Contracts will be for one-year terms and may be automatically renewable. At least one contract must be with a non-profit entity. OPM will adminster these contracts in the same way it administers plans offered through the Federal employees health benefit program, including requirements for medical loss ratios, profit margins, premiums, and other terms and conditions "as are in the interests of enrollees in such plans." OPM can prohibit plans that don't meet these requirements from being offered. Of the offered plans, there must be at least one that does not provide coverage for abortion services. OPM can withdraw from a contract only after giving notice and opportunity for a hearing to the carrier.
To be eligible, carriers must be licensed in each state and subject to applicable state laws. They must offer plans with benefits packages uniform in each state and providing the essential health benefits. The plans must meet the requirements of qualified health plans, including the bronze, silver and gold levels of coverage and catastrophic coverage. Premium determinations must be on the basis of the requirements in the health insurance market reforms, and the carriers must offer the plans in all geographic regions and in all states that adopted adjusted community rating before March 23, 2010. States may require enhanced benefits at their option.
Individuals enrolled in a multi-state plan are eligible for premium support tax credits and reduced cost-sharing, but an increase in premium generated by a state's enhanced benefits requirement will not increase the amount of the tax credit. States will have to cover the additional tax subsidies themselves. If a state has a premium requirement for age differentials that is more restrictive than the federal requirements, the state's requirement prevails. This means that, if the federal requirement is that premiums for the oldest enrollees can be no more than three times those for the younges, and a state's requirement is no more than two times, the carrier must abide by the "two times" limit. Contracted multi-state plans are automatically certified to be offered through a state's exchange.
There is a phase-in period for multi-state plans. OPM can contract with a carrier that agrees to offer a plan in at least 60 percent of the states the first year, 70 percent the second year, 85 percent the third year, and all states every year after that. The existing requirements for health plans offered to federal employees apply to the multi-state plans to the extent that they do not conflict with the PPACA's requirements. Administration of the multi-state plans cannot reduce the financial and personnel resources OPM allocates to administering the Federal Employees Health Benefit Program. Enrollees in the multi-state plans will form a risk pool separate from the FEHBP. Premiums paid for coverage under these plans are not considered to be federal funds "for any purposes." Carriers participating in the FEHBP are not required to offer multi-state plans.
Lastly, OPM must create an advisory board, a significate percentage of whose members must be multi-state plan enrollees or their representatives, to make recommendations for the provision and administration of the plans. Congress is authorized to appropriate funds necessary to carry out this section of the law.
That's the end of Part IV, State Flexibility To Establish Alternative Programs. Next time, we get our hands really dirty -- reinsurance. Book your seats early.
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