In August 2011, the U.S. Department of Health and Human Services (“HHS”) and the U.S. Treasury released the following proposed rules addressing the exchange mandate under the Patient Protection and Affordable Care Act (“PPACA”):

  • Access to Coverage for Consumers and Small Businesses: This HHS proposed rule is aimed at simplifying enrollment for consumers in qualified health plans and helping consumers pay for health coverage through premium tax credits and cost sharing reductions. Under this rule, small employers participating in the Small Business Health Options Program (or “SHOP”) will also be able to offer their employees a choice of health plans and cut their costs with new tax credits.
  • Health Insurance Premium Tax Credit: Under this Treasury proposed rule, individuals and families will receive premium tax credits to help defray insurance costs.
  • Medicaid Eligibility: Under this HHS proposed rule, drafters attempt to coordinate the exchange with Medicaid and Children’s Health Insurance Program (or “CHIP”) to make enrollment seamless for qualified Americans and reduce the administrative burden on states.

In her letter to Governors introducing the proposed rules, HHS Secretary Kathleen Sebelius discussed the partnership opportunity that will allow states to work with HHS to set up exchanges. In 2010, HHS awarded 49 states and the District of Columbia $50 million to begin planning their exchanges, and HHS expects to make more grant awards in the coming months.

The letter also solicited comments over the next 75 days. Accordingly, HHS will conduct an outreach campaign over the next several weeks and will ask for public comment on the three proposed rules from employers, consumers, state leaders, health care providers and insurers, among others. In addition, HHS has indicated that it will hold forums in the following cities:

  • Atlanta, GA
  • Chicago, IL
  • Denver, CO
  • New York, NY
  • Portland, OR
  • Sacramento, CA

To see a fact sheet on the three proposed rules, click here.

To see a copy of the letter from Secretary Sebelius, click here.

For more information on the tax credit, click here.