In its August 2011 letter to the U.S. Office of Personnel Management (“OPM”), the National Association of Insurance Commissioners (“NAIC”) raised concerns over OPM’s proposed guidelines for Multi-State Plans promulgated pursuant to the Patient Protection and Affordable Care Act (“PPACA”).1  These guidelines were drafted in response to OPM’s charge under PPACA that it contract with at least two health plans which must be automatically sold on all state Exchanges.

The NAIC’s comments highlighted what it perceives as potential market disruption should Multi-State Plans be exempt from the rules that govern other plans offered through an Exchange or in the insurance market as a whole. The NAIC noted that separate rules could threaten, among other things, plan solvency and lead to market segmentation, consumer confusion and a loss of consumer protections.  The NAIC urged OPM to require Multi-State Plans to meet all state laws and regulatory requirements stating that PPACA “intended to ensure a level playing field for all plans offered through Health Insurance Exchanges.” The NAIC further indicated that to ensure competition and allow consumers to evaluate offerings on the basis of price, benefits, and network, “there should be no distinction between a Multi-State Plan and any other carrier offering coverage in an Exchange.”