Health care reform requires HHS to begin operating a new Consumer Operated and Oriented Plan (CO-OP) program by July 1, 2013. The program will promote the development of “qualified nonprofit health insurance issuers” by issuing loans and grants.

In early February, HHS issued a request for comments that highlights many of the open issues surrounding CO-OPs and the CO-OP program.

One fundamental question addressed in the request: just what “issuers” does the CO-OP program cover? The term “health insurance issuer” is not defined in the section of the health care reform law establishing the new CO-OP program. One reasonable interpretation might be to look to the Public Health Services Act definition of “health insurance issuer,” which is defined as an insurance company, insurance service, or insurance organization (including an HMO) that is licensed to engage in the business of insurance in a state and that is subject to state insurance law.

The health care reform statute does set some limitations on what constitutes a “qualified nonprofit health insurance issuer.” For example, issuers must not have been in existence on July 16, 2009; substantially all of their activities must consist of the issuance of health plans in small group and individual markets; and any profits must be used to lower premiums, improve benefits, or otherwise improve the quality of health care. The notice requests comments on the substantive requirements regarding eligibility for the CO-OP program’s grants and loans, as well as the procedural issues involved in administering the program.

Comments on the notice are due on March 4.