The federal Office of Personnel Management (OPM) had a tricky job in setting rules for multi-state health plans (MSP), which eventually will be offered in all states through Health Insurance Exchanges (HIX). The OPM had to take decide how to allow for disparate state and federal requirements for exchange-based plans, while promoting fair competition and consumer choice. The final rule for multi-state plans was released earlier this year, and it is worth learning about for those interested in Health Insurance Exchanges.

Health Insurance Exchanges and Qualified Health Plans:

Consumers buying health coverage in the Health Insurance Exchanges will have two types of options: Qualified Health Plans (QHP) or multi-state health plans. For both types of plans, the Affordable Care Act (ACA) set baseline requirements for provider network adequacy, eligibility, enrollment, and coverage levels defined by actuarial value, and essential health benefits (EHB), among other requirements.

States that have chosen to run their own exchanges will flesh out the details of QHP requirements and plan management, and there could be a fair amount of variation from state to state. Some exchanges, such as Connect for Health Colorado, will to serve as market facilitators and approve any QHP that meets state and federal requirements. Covered California and several other exchanges will select QHP issuers through a competitive contracting process. States also have different definitions of provider network adequacy and have specific requirements for the metal-level of coverage QHPs must offer. Many state requirements have yet to be finalized for the state-run and joint federal-state operated Exchanges.

OPM Issues Final Rules for Multi-State Plans:

The health reform law requires at least two multi-state health plans to be offered in each exchange. But the federal Office of Personnel Management, not states, will be in charge of regulating multi-state plans. The OPM currently runs the Federal Employees Health Benefits (FEHB) Program.

The OPM recently finalized its rules for the Multi-State Plan Program (MSPP), after a two-year process. OPM will contract with at least two issues to offer multi-state plans. One of the plans must be a non-profit corporation. Among other requirements, MSPs must:

  • offer plans in all states and the District of Columbia within four years of becoming an MSP
  • become licensed in states where they operate, and abide by QHP enrollment and eligibility requirements in those states
  • offer a uniform benefits package in each state
  • offer a benefits package that is “substantially equal” to either the EHB benchmark plans in each state where the MSP is offered, or any EHB benchmark plan the OPM selects

That last requirement received several comments that asking MSP to follow a mix of state and federal EHB benchmarks would create the possibility for adverse selection and consumer confusion. But the OPM kept the rule, saying that there was no evidence the rule would create confusion and that differences among federal and state benchmark plans are “unlikely to be actuarially significant.”

Read the OPM’s final multi-state plan rule here.

Resources for Understanding the MSPP:

The Multi-State Plan Program presents yet another complicating factor in implementing Health Insurance Exchanges, set to begin enrollment on Oct. 1, 2013. Here is a list of good resources to help explain the MSPP and the recent OPM rules:

Multi-State Health Plans: The Final Rule, by Jane Hyatt Thorpe, Trish Riley, and Teresa Cascio, for Health Reform GPS

Multi-State Health Plans Implementation Brief, also by Jane Hyatt Thorpe, Trish Riley, and Teresa Cascio, for Health Reform GPS

MSPP Fact Sheet, by the U.S. Office of Personnel Management

Final Rule: Establishment of the Multi-State Plan Program for the Affordable Insurance Exchanges, by the Office of Health Innovation, Virginia Commonwealth University School of Medicine

Implementing Health Reform: The ACA’s Multi-State Plan Program, by Timothy Jost, for Health Affairs

Implementing Health Reform: The Multi-State Plan Program Final Rule, also by Timothy Jost, for Health Affairs