State Exchanges March On or do They?

States are moving ahead on building State Exchanges, but…

Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that the following states have received new grants to establish State Exchanges under the Affordable Care Act:

California
Connecticut
Hawaii
Iowa
Maryland
Nevada
New York
Vermont

“We continue to support states as they move forward building an Exchange that works for them,” Secretary Sebelius said. “Thanks to the health care law, Americans will have more health insurance choices and the ability to compare insurance plans.”

According to the press release from HHS, “Today’s awards will give states additional resources and flexibility to establish an Exchange. California, Hawaii, Iowa, and New York today have been awarded Level One Exchange Establishment grants, which provide one year of funding to states that have begun the process of building their Exchange. Connecticut, Maryland, Nevada, and Vermont were awarded Level Two Establishment grants, which are provided to states that are further along in building their Exchange and offers funding over multiple years.”

While more states appear to be at least moving towards establishment of the State Insurance Exchanges, many still are in the beginning stages. According to the Center on Budget and Policy Priorities (CBPP) recent review 14 States have Enacted Legislation or have an Executive Order to establish State Exchanges. However the majority of states are still not close to enacting legislation to establish the State Exchanges. Some have legislation pending (6), have had legislation that failed, has been withdrawn, expired or vetoed (27) or flat out declined to set up an exchange at all (6).

So what does this mean to employers?

It makes planning and getting procedures in place to coordinate with State Exchanges more difficult. For small employers who may decide to not offer health insurance coverage and let their employees go into a State Exchange or who may even want to purchase health insurance coverage through the exchanges may have to wait past 2014. Unless the Federal Government steps in to develop the exchange, which is possible but with so many states still in the planning and legislative stages this may be difficult to pull off by 2014.

The problem is, the other aspects of the Affordable Care Act, such as Individual Mandates and Employer Penalties may go into affect while a main component of PPACA has not been fully established. The CBPP has provided a list of states and the status of the legislation for each. Employers will need to keep an eye on the state(s) that impact them to determine the best course of action going forward.

How do the state exchanges affect your overall planning for Health Care Reform?