Health care reform created a new federal program, the Consumer Operated and Oriented Plan (CO-OP) program, to foster the creation of qualified non-profit health insurance issuers to offer qualified health plans in the individual and small group markets in the states in which the issuers are licensed to offer such plans.  The goal of the program is to create a new CO-OP in every state in order to expand the number of health plans with a focus on integrated care and greater plan accountability.  The CO-OP program helps the entities applying to become qualified nonprofit health insurance issuers by providing loans to help them meet their start-up costs and grants to help them meet any applicable state solvency requirements.

The primary guidance issued to date has been the HHS Final Regulations (published December 13, 2011), which describe the statutory basis of the CO-OP program, set forth definitions, specify the criteria to be eligible for a loan under the CO-OP program, and set forth the standards for a CO-OP, and the Funding Opportunity Announcement (last amended in September 2012), which provides detailed information on CO-OP eligibility, application and submission procedures, and the application review and selection process.

Loan applications were first due October 17, 2011, but subsequent applications have been accepted on a quarterly basis, and the next quarterly application deadline is December 31, 2012.  Loan awards are announced on a rolling basis.  For example, last week, CMS announced the latest CO-OP loan award to Coordinated Health Plans of Ohio.  To date, a total of 23 non-profit entities offering coverage in 23 different states have received loans.