Final Rule on CO-OPs released by HHS

Posted on December 9, 2011 | No Comments
Filed under Centers for Medicare & Medicaid Services, Department of Health and Human Services, Health Insurance, Key Developments, Rulemaking, Rules, and Guidance

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The U.S. Department of Health and Human Services (HHS) has issued a final rule on the Consumer Operated and Oriented Plan (CO-OP) program. Created by the Affordable Care Act (ACA), the CO-OP program seeks to establish nonprofit cooperative insurance plans in all States. The ACA authorizes HHS to make loans available to eligible prospective CO-OPs, with the goal of creating one CO-OP per State. The ultimate intent is for CO-OPs to be able to offer affordable, qualified health plans (QHPs) to consumers through each State’s health insurance Exchange.

For more information on the CO-OP program, click here.

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Commonwealth Fund issue brief reviews CO-OP sustainability strategies

April 17, 2012

The Affordable Care Act (ACA) paves the way for groups to develop innovative, affordable health insurance and care options known as Consumer Operated and Oriented Plans (CO-OPs). These CO-OPs will be nonprofit, consumer-controlled entities that are designed to serve individuals and small businesses, especially in noncompetitive markets. The CO-OP provision was included in the Affordable Care Act to address the lack of affordable health plan alternatives in many state and regional markets and to counter a trend toward market concentration. Despite their promise, CO-OPs face a number of business challenges that go beyond typical start-up hurdles. An issue brief recently released by The Commonwealth Fund lays out a number of innovative strategies CO-OP organizers are developing to increase the odds of long-term sustainability and economic success. These strategies—aimed at building market share, creating integrated provider networks, and achieving cost savings through payment reform—could establish CO-OPs as a viable new entrant in the health care field.

RWJF releases new Urban analysis on CO-OPs

September 2, 2011

A new report written by Bradford Gray of the Urban Institute and funded by the Robert Wood Johnson Foundation examines the future sucess of the Consumer Operated and Oriented Plan Program (CO-OP) under the Affordable Care Act (ACA). The report, "Consumer Operated and Oriented Plans (CO-OPs): An Interim Assessment of Their Prospects," lays out the challenges CO-OPs will likely face over the coming years, and pins their long-term success on their ability to collaborate and evolve in terms of plan administration and provider network development.

CMS awards $639 million in loans to nonprofit health insurers

February 22, 2012

The Centers for Medicare & Medicaid Services (CMS) announced a total of $638.7 million in federal loans to seven nonprofit health insurance co-operatives. The groups are the first to receive loan funds under the Affordable Care Act (ACA). The purpose of these funds will be to improve quality, benefits, and premium affordability for subscribers. The creation of Consumer Operated and Oriented Plans (known as CO-OPs) is a provision under the ACA . CO-OPs are intended to be directed by their customers to offer individuals and small businesses more affordable, consumer-friendly health insurance. CMS issued a final rule establishing the CO-OP program in December 2011 (237 HCDR, 12/9/11). The groups receiving the awards Feb. 21 were...

IRS releases rules on tax exempt entities under the CO-OP Program

February 6, 2012

The Internal Revenue Service (IRS) released new rules for the Consumer Operated and Oriented Plan (CO-OP) Program regarding what will be recognized as tax exempt under Section 501(c)(29) of the tax code. Proposed and temporary IRS rules denote that qualified nonprofit CO-OP health insurers will need to apply for tax-exempt recognition with IRS. IRS and the Treasury Department will recognize them as exempt effective on either their date of formation or March 23, 2010, the date that the ACA became law. To qualify for a tax exemption, the entity must have received a loan from CMS for operation. IRS's upcoming revenue procedure requires that a copy of the CMS notice of award and the fully executed loan agreement are included in the entity's application for exemption. The IRS temporary rules did include statutory guidance for tax exemption: in addition to notifying the Treasury Department that the group is applying for exemption recognition, no private inurement of earnings to shareholders or individuals can exist, (unless it lowers premiums, improves benefits, or improves the quality of health care delivered to the organization's members). Additionally, no attempt to influence legislation or politics can be made. HHS issued the CO-OP final rule in December, which discussed CO-OP Program eligibility standards. For for information on CO-OPs, click here.

HHS issues NPRM on CO-OP plans

July 18, 2011

The U.S. Department of Health and Human Services (HHS) has issued a notice of proposed rulemaking (NPRM) on the Consumer Operated and Oriented Plan (CO-OP) program. Established by the Affordable Care Act (ACA), the CO-OP program allows private, non-profit insurance plans to be offered through the Exchanges as an alternative for consumers to traditional, for-profit plans. CO-OP plans are consumer-run, and accountable to their individual membership in a way that most traditional for-profit health plans typically are not. For more information on the CO-OP program, click here.

Update to Consumer Operated and Oriented Plan (CO-OP) Program: Final Rule

January 18, 2012

The Centers for Medicare and Medicaid Services (CMS) issued its final rule implementing the Consumer Operated and Oriented Plan (CO-OP) Program on December 13, 2011. This rule finalizes the notice of proposed rulemaking (NPRM) issued by CMS on July 20, 2011, and takes into consideration the numerous comments received during the public notice and comment period ending September 16, 2011. Established by §1322 of the Affordable Care Act (ACA), the CO-OP program develops and creates new private, non-profit health insurance issuers to offer qualified health plans (QHPs) through state Exchanges as an alternative for consumers to traditional, for-profit plans. CO-OP plans are consumer-run, and accountable to their individual membership in a way that most traditional for-profit health plans typically are not. The ACA requires HHS to award funds for start-up loans and solvency grants to eligible CO-OP applicants in order to enable each state to have at least one CO-OP. In making these awards, HHS must take into account recommendations from the Advisory Board created by ACA §1322(b)(2). Two previous Implementation Briefs provided an overview of the CO-OP program and set forth the key provisions of the proposed rule; this update describes significant changes to the proposed rule as codified in the final rule.

Update: Consumer Operated and Oriented Plan (CO-OP) Program

August 17, 2011

On July 20, 2011, the Centers for Medicare and Medicaid Services (CMS) issued a notice of proposed rulemaking (NPRM) with comments due September 16, 2011, regarding the Consumer Operated and Oriented Plan (CO-OP) program. Established by §1322 of the Affordable Care Act (ACA), the CO-OP program develops and creates new private, non-profit health insurance issuers to offer qualified health plans (QHPs) through state Exchanges as an alternative for consumers to traditional, for-profit plans. CO-OP plans are consumer-run, and accountable to their individual membership in a way that most traditional for-profit health plans typically are not. The ACA requires HHS to award funds for start-up loans and solvency grants to eligible CO-OP applicants in order to enable each state to have at least one CO-OP. In making these awards, HHS must take into account recommendations from the Advisory Board created by §1322(b)(2) of the ACA.

Health Insurance Exchanges Update: Qualified Health Plans, Reinsurance, Risk Corridors and Risk Adjustment

July 19, 2011

A major problem in the U.S. health care system is the lack of affordable health insurance options for individuals and small businesses. These groups also have no easy way to compare plans in terms of premium cost, benefits and cost sharing, provider networks, or quality of care provided. The Affordable Care Act (ACA) seeks to address these problems by making private health insurance available to qualified small businesses and individuals through health insurance Exchanges beginning January 1, 2014.

The Consumer Operated and Oriented Plan (CO-OP) Program

June 22, 2011

During the debate that led to passage of the ACA, concerns were raised that millions of individuals and small groups lack sufficient choice among insurers in the existing private insurance market. Proponents (including those who sought a public insurance option) advocated for congressional investment in alternative sources of coverage in order to assure choice and competition, as well as to address the highly concentrated nature of the health insurance market (in most states 3 or fewer for-profit insurance companies account for over 65% of the market). A “public option” was proposed as a means of promoting an alternative to private coverage. In lieu of a public option, which proved highly controversial, the ACA included the Consumer Operated and Oriented Plan (CO-OP) program, whose purpose is to develop private non-profit alternatives to for-profit insurers. The central aim of the CO-OP program is to create consumer-run health insurers accountable to members, rather than to investors.

Update: Health Insurance Exchanges

November 22, 2010

The Affordable Care Act establishes “American Health Benefit Exchanges” (serving individuals) and “SHOP” Exchanges (serving small employer groups), to be operated by states that elect to establish exchanges for individuals and employer groups through which they can buy “qualified health plans.”