Contents

• Introduction
• Exchange Structure and Operation
• Exchange Consumer Assistance
• Exchange Funding
• Exchange Consumers
• Individuals
• Enrollment Periods
Types of Exchanges
• Individual and SHOP Exchanges
• State-Based and Federally Facilitated Exchanges
• Facilitating Purchase of Coverage
• Individual Exchanges
• Eligibility and Enrollment Process
• Enrollment Periods and Enrollment Estimates
• Premium Tax Credits and Cost-Sharing Subsidies
• Small Businesses
• Enrollment Periods
• Small Business Health Insurance Tax Credit
• Exchange Plans
• Qualified Health Plans
• Other Types of Plans Offered Through Exchanges
• Child-Only Plans
• Multi-State Plans
• Consumer Operated and Oriented Plans
• Catastrophic Plans
• Dental-Only Plans
• Exchange Enrollment
• Status of Exchange Implementation
• 2014 Coverage Year
• 2015 Coverage Year
• 2016 Coverage Year
• Additional Resources

Figures

• Figure 1. Individual and SHOP Exchange Types by State, 2016
• Figure 2. The 10 Essential Health Benefits
• Figure 3. Actuarial Value Levels

Tables

• Table 1. Additional Resources

Summary

TheReductions

SHOP Exchanges

Eligibility and Enrollment Process

Changes in SHOP Exchange Web Portal Functionality

Enrollment Periods and Enrollment Estimates

Small Business Health Care Tax Credit

Individual and SHOP Exchange Enrollment Assistance

Administering the Exchanges

Qualified Health Plans

Types of QHPs and Other Plans Offered Through Exchanges

Exchange Funding

Further Reading

Summary

The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) requires health insurance exchanges to be established in every state. Exchanges are marketplaces where individualsin which consumers and small businesses can shop for and purchase private health insurance coverage. States mustIn general, states must have two types of exchanges: an individual exchange and a small business health options program (SHOP) exchange.

Exchanges may be established either by the state itself as a state-based exchange (SBE) or by the Secretary of Health and Human Services (HHS) as a federally-facilitated exchange (FFE). facilitated exchange (FFE). Some states have SBE-FPs: they have SBEs but use the federal information technology platform, including the federal exchange website www.Healthcare.gov. In states with FFEs, the exchange may be operated solely by the federal government alone or in conjunction with the state.

States may have different structures for their individual and SHOP exchanges. Consumers

Persons who obtain coverage through the individual exchange may be eligible for financial assistance from the federal government. The financialFinancial assistance in the individual exchanges is available in two forms: premium tax credits and cost-sharing subsidiesreductions. Small businesses that use the SHOP exchange may be eligible for small business health insurance tax credits. The tax credits assist small businesses with the cost of providing health insurance coverage to employees.

The ACA generally requires that health insurance plans offered through an exchange are Qualified Health Plans (QHPs). Typically in order toqualified health plans (QHPs). To be a certified as a QHP, a plan must offer the essential health benefits, comply with cost-sharing limits, and meet certain market reforms. Exchanges may also offer other types of health insurance plans such as catastrophic andbe offered by a state-licensed issuer and must meet specified requirements, including covering the essential health benefits (EHB). QHPs sold in the individual and SHOP exchanges must comply with the same state and federal requirements that apply to QHPs and other health plans offered outside of the exchanges in the individual and small-group markets, respectively. Exchanges also may offer variations of QHPs, such as child-only or catastrophic plans, and non-QHP dental-only plans.

This report provides an overview of the various components of the health insurance exchanges. The report includesIt begins with summary information about how exchanges are structured, the intended consumers for health insurance exchange plans, and consumer assistance available in the exchanges, as specified in the ACA. The report also describes the availability of financial assistance for certain exchange consumers and small businesses and then discusses both individual and SHOP exchanges in terms of eligibility and enrollment, financial assistance for certain exchange consumers and small businesses, and enrollment assistance entities. The report also describes exchanges' role in certifying plans as qualified to be sold in their marketplaces and outlines the range of plans offered through exchanges. Moreover, the report provides a brief summary of the implementation and operation of exchanges since 2014.

Finally, the report briefly addresses funding for the exchanges. Where applicable, the report references other CRS reports that have more information on various topics.

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Overview of Health Insurance Exchanges

Introduction

The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) requires health insurance exchanges (also known as marketplaces) to be established in every state. ACA exchanges are virtual marketplaces in which individualsconsumers and small businesses can shop for and purchase private health insurance coverage. and, where applicable, be connected to public health insurance programs (e.g., Medicaid).¹ Exchanges are intended to simplify the experience of providing and obtaining health insurance. They are not intended to supplant the private market outside of the exchanges but rather to provide an additional source of private health insurance coverage options.

This report provides an overview of the various componentskey aspects of the health insurance exchanges. The report includes summary information about how exchanges are structured, the intended consumers for health insurance exchange plans, and consumer assistance available in the exchanges, as specified in the ACA. The report also describes the availability of financial assistance for certain exchange consumers and small businesses and outlines the range of plans offered through exchanges. Moreover, the report provides a brief summary of the implementation and operation of exchanges since 2014. While the report provides a high-level description of exchanges, it also includes references to other CRS reports that provide further information.

Exchange Structure and Operation

The ACA required health insurance exchanges to be established in all states. These health insurance exchanges were in operationthe major functions of exchanges and how they are structured. It describes individual and small business eligibility and enrollment processes, provides enrollment estimates, explains the financial assistance available to certain consumers and small businesses, and discusses consumer enrollment assistance options. The report also reviews the role of exchanges in certifying participating plans and outlines the range of plans offered through exchanges. It briefly addresses funding for the exchanges. It provides a high-level description of these exchange-related topics while referencing other CRS reports with further information on specific topics, including on topics related to market stabilization policy considerations. Types of Exchanges Individual and SHOP Exchanges The ACA required health insurance exchanges to be established in all states and the District of Columbia (DC). In general, the health insurance exchanges began operating in October 2013 to allow consumers to shop for health insurance plans that began as soon as January 1, 2014. ACA exchanges are marketplaces in which individuals and small businesses can shop for and purchase private health insurance coverage. Each state has Most states have two types of exchanges—an individual exchange¹ and a small business health options program (SHOP) exchange. An individual exchange is where individuals can purchase nongroup insurance and apply for premium and cost-sharing subsidies. A SHOP exchange is where small businesses can purchase small-group insurance and apply for small business health insurance tax credits. These exchanges may be operated under the same or separate governing structures. In this report, the use of the term exchange without the qualifier of individual or SHOP refers to both types of exchanges.

2 In an individual exchange, eligible consumers can compare and purchase non-group insurance for themselves and their families and can apply for premium tax credits and cost-sharing reductions.³ In a SHOP exchange, small businesses can compare and purchase small-group insurance and can apply for small business health insurance tax credits; in addition, employees of small businesses can enroll in plans offered by their employers on a SHOP exchange.⁴ Besides facilitating consumers' and small businesses' purchase of coverage (by operating a web portal, making determinations of eligibility for coverage and any financial assistance, and offering different forms of enrollment assistance), the other major function of the exchanges is to certify, recertify, and otherwise monitor the plans that participate in those marketplaces. Individual and SHOP exchanges can be operated by either the state or the federal government, as described below. State-Based and Federally Facilitated Exchanges

A state can choose to establish its own state-based exchange (SBE). If a state opts not to administer its own exchange, or if the Department of Health and Human Services (HHS) determines that the state is not in a position to administer its own exchangedo so, then HHS willis required to establish and administer the exchange in the state as a federally-federally facilitated exchange (FFE). States also may have a state-based exchange using a federal platform (SBE-FP), which means they have an SBE but use the federally facilitated information technology (IT) platform (i.e., HealthCare.gov). For the 2018 plan year, 34 states have FFEs, 12 states have SBEs, and 5 states have SBE-FPs.⁵ In addition, state involvement in the FFEs may vary(FFE).

There are varying levels of state involvement in FFEs. In many states with FFEs, the exchange is wholly operated and administered by HHS. InBut in some cases, states may partner with HHS to establish and administer the exchange. For the 2016 coverage year, 34 states have FFEs, 12 states and the District of Columbia (DC) have SBEs, and 4 states have SBEs but use the federal information technology (IT) platform (i.e., HealthCare.gov) (see Figure 1).²

Moreover, HHS may administer the individual exchange while the state administers thepartner with HHS to perform some functions, such as plan management or consumer assistance.⁶

Like the individual exchanges, SHOP exchanges may be federally facilitated (FF-SHOP; 32 states), state-based (SB-SHOP; 16 states), or state-based using the federal IT platform (SB-FP-SHOP; 2 states).⁷ One state is exempted from operating a SHOP exchange.⁸ For the 2018 plan year, most states' individual and SHOP exchanges are administered in the same way (i.e., both state-based or both federally facilitated). However, a handful of states have different approaches for their individual and SHOP exchanges.

See Figure 1 and Table A-1 for the exchange types by state. SHOP exchange. For the 2016 coverage year, most states have the same entity administer both the individual and SHOP exchanges (see Figure 1). However, three states—Arkansas, Mississippi, and Utah—elected to administer their SHOP exchanges while HHS administers their individual exchanges (see Figure 1).

Figure 1. Individual and SHOP Exchange Types by State, 2016 Plan Year 2018

Source: CRS illustration of HHS classification of individual and SHOP exchange types. Note: SHOP is the small business health options program.

Exchange Consumer Assistance

Statute and regulations require that exchanges carry out certain consumer assistance functions. Some functions require that exchanges provide direct support to consumers. For example, exchanges must provide for the operation of a call center that addresses the needs of consumers who have questions about individual exchanges and SHOP exchanges.

Exchanges are also expected to provide indirect support to consumers by implementing consumer assistance personnel programs. Exchanges must establish Navigator programs and certified application counselor programs, and exchanges have the option to implement a program for non-Navigator consumer assistance personnel. Under these programs, individuals are trained to help consumers make informed decisions about their insurance options and help consumers access individual and SHOP exchange coverage. However, consumer assistance personnel may not enroll individuals or small employers in coverage.

Pursuant to state law, exchanges may also allow insurance agents and brokers to help individuals and small employers obtain coverage through exchanges.³ Unlike consumer assistance personnel, agents and brokers may enroll individuals and small employers in coverage through exchanges.

For more information about exchange consumer assistance, see CRS Report R43243, Health Insurance Exchanges: Health Insurance "Navigators" and In-Person Assistance.

Exchange Funding

The ACA provided an indefinite appropriation for HHS grants to states to support the planning and establishment of exchanges. For each fiscal year between FY2011 and FY2014, the HHS Secretary determined the total amount that was made available to each state for exchange grants.

None of the aforementioned exchange grants could be awarded after January 1, 2015, and exchanges were expected to be self-sustaining beginning in 2015. The ACA allows exchanges to generate funding to sustain their operations, including by assessing fees on participating health insurance plans. To raise funds for each of the FFEs, beginning in 2014, HHS is assessing a monthly fee on each health insurance plan that offers plans through a FFE.

For more information about funding for exchanges, see CRS Report R43066, Federal Funding for Health Insurance Exchanges.

Exchange Consumers

The ACA specifies that exchanges are established for the purpose of offering health plan options to individuals and small businesses.

Individuals

Individuals may enroll in plans through their states' exchanges as long as they (1) meet state residency requirements;⁴ (2) are not incarcerated, except individuals in custody pending the disposition of charges; and (3) are U.S. citizens, U.S. nationals, or "lawfully present" residents.⁵ Undocumented individuals are prohibited from purchasing coverage through the exchanges, even if they could pay the entire premium.

Individuals may purchase health insurance in the individual exchanges for themselves via individual plans or for their families via family plans.

Enrollment Periods

Individuals may enroll in exchange coverage only during specified enrollment periods. Most individuals enroll during the annual Open Enrollment Period (OEP). The next OEP, for 2017 exchange coverage, begins November 1, 2016, and ends on January 31, 2017.

Individuals may also be allowed to enroll during a Special Enrollment Period (SEP). Individuals must qualify for enrollment during an SEP. Generally, this is due to a change in personal circumstances, for example, marriage or adoption.⁶

Premium Tax Credits and Cost-Sharing Subsidies

Individuals purchasing coverage through the individual exchanges may be eligible to receive financial assistance. Eligibility for such assistance is based on income and provided in the form of premium tax credits and cost-sharing subsidies.

The premium tax credit is generally available to individuals who do not have access to subsidized public coverage (e.g., Medicaid) or employment-based coverage that meets certain standards.⁷ The credit is designed to reduce an eligible individual's cost of purchasing health insurance coverage through the exchange. The credit itself is both advanceable and refundable, meaning tax filers need not wait until the end of the tax year to benefit from the credit and may claim the full credit amount even if they have little or no federal income tax liability. The amount of the premium tax credit varies from person to person. However, the credit is designed to provide larger credit amounts to individuals with lower incomes compared to those with higher incomes.

In addition to premium tax credits, certain individuals may also be eligible to receive subsidies that go toward cost-sharing expenses,⁸ such as deductibles, coinsurance, and co-payments. Cost-sharing assistance is provided in two forms. The first form of assistance reduces the annual out-of-pocket limit Sources: Congressional Research Service (CRS) illustration based on data from the following sources: Individual exchange types: Centers for Medicare & Medicaid Services (CMS), "2018 Marketplace Open Enrollment Period Public Use Files: 2018 OEP State-Level Public Use File," April 18, 2018, at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Marketplace-Products/Downloads/2018_OE_State.zip. SHOP exchange types: Kaiser Family Foundation, "State Health Insurance Marketplace Types, 2018," at https://www.kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/; verified at Healthcare.gov at https://www.healthcare.gov/small-businesses/employers/. Notes: SHOP = small business health options program; IT = information technology. Counts of "states" include the District of Columbia. In the individual exchanges, "plan year" is generally that calendar year, but group coverage plan years, including in the SHOP exchanges, may start at any time during a calendar year. See "Types of Exchanges" in this report for discussion of the different exchanges. See Table A-1 for the exchange types by state in table form and for additional details. Facilitating Purchase of Coverage

A primary function of the exchanges is to provide a way for consumers and small businesses to compare and purchase health plan options offered by insurers.⁹

Individual Exchanges Eligibility and Enrollment Process

Consumers may purchase health insurance plans for themselves or their families in their state's individual exchange. Consumers may enroll as long as they (1) meet state residency requirements;¹⁰ (2) are not incarcerated, except individuals in custody pending the disposition of charges; and (3) are U.S. citizens, U.S. nationals, or "lawfully present" residents.¹¹ Undocumented individuals are prohibited from purchasing coverage through the exchanges, even if they were to pay the entire premium without financial assistance.

Consumers can use their state's exchange website (Healthcare.gov or a state-run site) to compare and enroll in plans, and the exchange websites are required to display a calculator that estimates consumers' costs after any cost-sharing reductions or premium tax credits for which they are eligible (see "Premium Tax Credits and Cost-Sharing Reductions" in this report). Consumers may be linked to Medicaid or the State Children's Health Insurance Program (CHIP) enrollment pages if they are eligible.

In addition to using the exchange websites, consumers can enroll by phone, by mail, or in person—including through an agent, broker, or plan issuer—as available by state. Enrollment assistance is available for those who want it (see "Individual and SHOP Exchange Enrollment Assistance" in this report).

Once the exchange receives and verifies consumers' eligibility and enrollment information, it may continue to serve as a conduit through which consumers pay their premiums to their issuers. Alternatively, consumers may pay premiums directly to their issuers.

Enrollment Periods and Enrollment Estimates

Consumers may enroll in coverage through the exchanges only during specified enrollment periods.

Anyone eligible for exchange plan coverage may enroll during an annual open enrollment period (OEP).¹² The OEP typically takes place in fall of the year preceding the plan year. The OEP for calendar year 2018 coverage was November 1, 2017, to December 15, 2017, for FFE and SBE-FP states (see Table 1 for enrollment periods). States with SBEs may observe different OEPs. For 2018 coverage, all 12 SBEs' OEPs lasted longer than the federal OEP.¹³ The OEP for plan year 2019 is currently set as November 1, 2018, to December 15, 2018, for FFE and SBE-FP states. Consumers also may be allowed to enroll for coverage in an exchange if they qualify for a special enrollment period (SEP).¹⁴ Generally, consumers qualify for SEPs due to a change in personal circumstances—for example, a change in marital status or number of dependents—or loss of qualifying coverage.¹⁵ HHS also may choose to offer SEPs or extend an OEP for some or all consumers due to broadly applicable circumstances.¹⁶ In addition, consumers generally may enroll in Medicaid or CHIP whenever they qualify, regardless of their state's exchange OEP. Annual individual exchange enrollment estimates to date are shown in Table 1. Given the exchange eligibility determination process as well as the OEPs and SEPs, data on exchange enrollment are released in stages. Pre-effectuated enrollment is the number of unique individuals who have been determined eligible to enroll in an exchange plan and have selected a plan. These individuals may or may not have submitted the first premium payment. In general, cumulative and final pre-effectuated enrollment estimates are released during and soon after an annual open enrollment period.

Subsequently, effectuated enrollment is the number of unique individuals who have been determined eligible to enroll in an exchange plan, have selected a plan, and have submitted the first premium payment for an exchange plan. Effectuated enrollment estimates generally are point-in-time and may change over the coverage year. For example, due to changes in life circumstances, an individual may disenroll (e.g., if later offered coverage through an employer) or enroll (e.g., given eligibility for an SEP) in an exchange plan.

Table 1. Individual Exchange Enrollment Periods and Enrollment Estimates by Year  

PY2014

PY2015

PY2016

PY2017

PY2018

Healthcare.gov OEP^a

Oct. 1, 2013-Mar. 31, 2014

Nov. 15, 2014-Feb. 15, 2015

Nov. 1, 2015-Jan. 31, 2016

Nov. 1, 2016-Jan. 31, 2017

Nov. 1, 2017-Dec. 15, 2017

National Enrollment, Pre-effectuated^b

8.0 million

11.7 million

12.7 million

12.2 million

11.8 million National Enrollment, Effectuated ^c

6.3 million as of Dec. 2014

8.8 million as of Dec. 2015 9.1 million as of Dec. 2016 ^d 10.3 million as of Feb. 2017 ^e

Not released as of this report

Source: CRS analysis based on Department of Health and Human Services (HHS) annual reports of individual exchange enrollment in private health insurance plans. Some of these reports are available at HHS, Assistant Secretary for Planning and Evaluation (ASPE), "Historical Research," at https://aspe.hhs.gov/historical-research. Some are available at CMS, Center for Consumer Information and Insurance Oversight (CCIIO), "Data Resources," at https://www.cms.gov/CCIIO/ Resources/Data-Resources/index.html; others are available elsewhere on the CMS site. The 2018 pre-effectuated estimates are available at CMS, "Health Insurance Exchanges 2018 Open Enrollment Period Final Report," April 3, 2018, at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-04-03.html. Contact report author for all sources.

Notes: PY = plan year; OEP = open enrollment period; SEP = special enrollment period. FFE = federally facilitated exchange; SBE = state-based exchange; SBE-FP = state-based exchange using the federal information technology platform. See "State-Based and Federally Facilitated Exchanges" in this report for more information.

a. The Healthcare.gov OEP applies to FFE and SBE-FP states. The OEPs of SBEs may be longer in a given year. In some years, there also have been federal OEP extensions or SEPs for broadly applicable situations, such as in the 2018 OEP, due to natural disasters in 2017. See "Enrollment Periods" and footnote 16 in this report. b. Pre-effectuated enrollment is the number of unique individuals who have been determined eligible to enroll in an exchange plan and have selected a plan but may or may not have submitted the first premium payment. Final pre-effectuated enrollment estimates are typically released following an OEP and include any broadly applicable OEP extensions or longer SBE OEPs. See "Enrollment Periods" in this report for more information. c. Effectuated enrollment is the number of unique individuals who have been determined eligible to enroll in an exchange plan, have selected a plan, and have submitted the first premium payment for an exchange plan. HHS may release effectuated enrollment estimates for different points in time over a plan year. See "Enrollment Periods" in this report for more information. d. CMS initially (in June 2016) reported 11.1 million effectuated enrollment as of March 2016. In June 2017, CMS updated this number to 10.8 million as of March 2016 and 9.1 million as of December 2016. e. As of the date this report was published, these are the latest effectuated data released for 2017. Premium Tax Credits and Cost-Sharing Reductions

Consumers purchasing coverage through the individual exchanges may be eligible to receive financial assistance. Eligibility for such assistance is based primarily on income and provided in the form of premium tax credits and cost-sharing reductions.¹⁷

The premium tax credit is generally available to consumers who do not have access to public coverage (e.g., Medicaid) or employment-based coverage that meets certain standards.¹⁸ The credit is designed to reduce an eligible individual's cost of purchasing health insurance coverage through the exchange. The amount of the premium tax credit is based on a statutory formula and varies from person to person. It is designed to provide larger credit amounts to individuals with lower incomes compared to those with higher incomes.

The premium credit is refundable, so individuals may claim the full credit amount when filing their taxes, even if they have little or no federal income tax liability. The credit also is advanceable, so instead of waiting until they file taxes, individuals may choose to receive the credit on a monthly basis to coincide with the payment of insurance premiums (technically, these advance payments go directly to issuers). Advance payments automatically reduce monthly premiums by the credit amount. Therefore, the direct cost of insurance to a consumer eligible for premium credits generally will be lower than the advertised cost for a given exchange plan.

In addition to premium tax credits, certain consumers also may be eligible to receive cost-sharing reductions that reduce out-of-pocket expenses.¹⁹ There are two forms of cost-sharing reductions, and individuals may receive both if they meet the applicable eligibility requirements.²⁰

The first form of cost-sharing assistance reduces the annual out-of-pocket limit applicable to an individual's exchange plan. Annual out-of-pocket limits apply to all plans in the exchanges and to other plans under the ACA. In 2018, the annual out-of-pocket limit is $7,350 for a self-only plan and $14,700 for coverage other than self-only (e.g., a family plan). In 2019, those limits will be $7,900 and $15,800, respectively.²¹ This form of cost-sharing assistance further lowers the spending cap for eligible consumers.

The second form reduces cost-sharing requirements applicable to an individual's exchange plan. All exchange plans must meet certain requirements related to actuarial value, or the percentage of allowed health care expenses that issuers will cover. This form of cost-sharing assistance reduces the percentage of costs that the individual is responsible for, effectively raising the actuarial value of the plan.²²

SHOP Exchanges Eligibility and Enrollment Process Certain small businesses are eligible to use the SHOP exchanges. For the purposes of SHOP exchange participation, states may define small employers (or small businesses) as employers that have 50 or fewer full-time employees or employers that have 100 or fewer full-time employees.²³ A majority of states define small as having 50 or fewer employees, and only four states employ the 100-or-fewer-employee definition for their SHOP exchanges.²⁴ As of 2017, all states have the option to allow large businesses to use SHOP exchanges, as well, but no states have taken that option.²⁵

To participate in a SHOP exchange, a small business must offer coverage to all of its full-time employees, meaning those working 30 or more hours per week on average.²⁶ The business may, but is not required to, offer coverage to part-time or other employees. Employees must meet the same citizenship and other eligibility requirements that apply in the individual exchanges.

For an employee to obtain coverage through a SHOP exchange, a SHOP-eligible employer must select one or more plan options on the SHOP exchange for its employees to choose from.²⁷ Then, employees can visit the SHOP exchange website to compare their employer's plan options and to enroll. Employers and their employees also can work with a SHOP-registered broker or directly with a plan issuer instead of going through their SHOP exchange's web portal (or if their SHOP exchange does not offer a web portal with enrollment functionality, as discussed below).

Small employers that want to offer more than one plan option to their employees generally are able to do so. Via the employee choice method, also called horizontal choice, the employer can allow its employees to select any plan at a certain coverage and value tier (e.g., a certain metal level of actuarial value).²⁸ As of 2017, there is also a vertical choice method, under which employers can allow their employees to select any plan "across all available actuarial value levels of coverage from a single issuer."²⁹

Changes in SHOP Exchange Web Portal Functionality

Citing early difficulties in getting some SHOP exchange websites online, CMS issued guidance in March 2014 that exchanges still developing their SB-SHOP websites could use a direct enrollment approach for plan year 2014, meaning small businesses and their employees would work directly with agents, brokers, or issuers to compare and purchase coverage rather than enrolling online.³⁰ In subsequent guidance, CMS extended that policy for plan years beginning in 2015-2019, still for SB-SHOPs only. As of April 2016, CMS indicated that SB-SHOPs would need to implement online portals in time for plan years beginning in 2019 and outlined different options for those states to consider, including transitioning to the federal IT platform (becoming an SB-FP-SHOP) or applying for an ACA Section 1332 waiver to obtain an exception to the requirement to have a SHOP exchange at all.³¹

Via the "2019 Notice of Benefit and Payment Parameters" (2019 Payment Notice) finalized in April 2018, HHS signaled a new policy direction, citing generally low employer participation in the SHOP exchanges and decreasing issuer participation.³² For plan years beginning in 2018, the direct enrollment approach is not just a transitional option for SB-SHOP states: it is the only option in FF-SHOP and SB-FP-SHOP states.³³ Although small businesses using the SHOP exchange in those states still will be able to use the Healthcare.gov portal to browse plans and determine their eligibility for small business tax credits (discussed below), they will not be able to enroll in a plan through the SHOP web portal. States with SB-SHOPs also can choose to maintain or return to a direct enrollment approach or to maintain online enrollment, if they have it.

HHS also confirmed in the 2019 Payment Notice that because of these reductions in federal SHOP web portal functionality, going forward, state-based SHOP exchanges will not be able to use the federal IT platform. In other words, HHS is eliminating the SB-FP-SHOP option (discussed above in "Types of Exchanges"). The two states that currently use this option, Kentucky and Nevada, may continue to do so if desired, knowing that the Healthcare.gov functionality is to be diminished.

As of June 2018, three SB-SHOP states still use their initial direct enrollment approaches and five other SB-SHOPs are transitioning to this approach and/or are instructing small businesses to enroll directly with issuers off the exchange because no issuers are offering plans in their SHOP exchange in 2018.³⁴ For FF-SHOP and SB-FP-SHOP exchange states, Healthcare.gov instructs users of the new direct enrollment approach.³⁵

Enrollment Periods and Enrollment Estimates Enrollment in a SHOP exchange is not limited to a specified OEP, except in certain circumstances.³⁶applicable to an individual's exchange plan.⁹ The second form reduces cost-sharing requirements applicable to an individual's exchange plan. Individuals may receive both types of cost-sharing subsidies if they meet the applicable eligibility requirements.

For more information about premium tax credits and cost-sharing subsidies, including applicable eligibility criteria, see CRS Report R44425, Eligibility and Determination of Health Insurance Premium Tax Credits and Cost-Sharing Subsidies: In Brief.

Small Businesses

Small businesses that offer health insurance coverage to all of their full-time employees are eligible to use SHOP exchanges. States can define small as businesses having either 100 or fewer or 50 or fewer employees.¹⁰ A majority of states define small as having 50 or fewer employees, and only a handful of states¹¹ employ the 100 or fewer employee definition. Beginning in 2017, states have the option to allow large businesses to use SHOP exchanges.

The small business must have its principal business in the SHOP exchange service area or offer coverage to each eligible employee through the SHOP exchange serving the employee's worksite. In order for an employee to be eligible to obtain coverage through a SHOP exchange, a SHOP-eligible employer must offer the employee coverage.

For more information about the SHOP exchanges, see CRS Report R43771, Small Business Health Options Program (SHOP) Exchange.

Enrollment Periods

Enrollment in a SHOP exchange is not limited to a specified open enrollment period except in certain circumstances.¹² Specific circumstances aside, a SHOP exchange must allow employers to enroll any time during a year, and the employer's plan year must consist of the 12-month period beginning with the employer's effective date of coverage.

Unlike individual exchange enrollment data, SHOP exchange enrollment data are not released annually. However, CMS estimated that there were approximately 27,000 small employers and 233,000 employees using the SHOP exchanges across the country in January 2017.³⁷ CMS previously estimated 10,700 active small employers and 85,000 employees in the SHOP exchanges as of May 2015.³⁸

Small Business Health CareSmall Business Health Insurance Tax Credit

Under the ACA, certainCertain small businesses are eligible for small business health insurancecare tax credits.³⁹ In general, these credits are available only to small businesses that purchase coverage through SHOP exchanges and subsidize their employees' premiums. The intent of the credit is to assist small employers with the cost of providing health insurance coverage to employees. The credits are available to eligible small businesses for two consecutive tax years (beginning with the first year the small employer purchases coverage through a SHOP exchange).

The maximum credit is 50% of an employer's contribution toward premiums for for-profit employers, and 35% of employer contributions for nonprofit organizations. The full credit is available to employers that have 10 or fewer full-time equivalents (FTEs) andequivalent (FTE) employees who have average taxable wages of $25,40026,600 or less. (in 2018).⁴⁰ In general, the credit is phased out as the number of FTEsFTE employees increases from 10 to 25 and as average employee compensation increases to a maximum of two times the limit for the full credit.⁴¹

Employees who enroll in a SHOP plan do not receive this tax credit, nor are they eligible for the premium tax credit or cost-sharing reductions available to certain consumers who purchase coverage on the individual market (discussed in this report in "Premium Tax Credits and Cost-Sharing Reductions").

Individual and SHOP Exchange Enrollment Assistance

Statute and regulations require that exchanges—both individual and SHOP—carry out certain consumer-assistance functions.⁴² Exchanges (both federally facilitated and state-based) must establish Navigator programs and certified application counselor (CAC) programs.⁴³ Under these programs, individuals are trained to conduct public outreach and education activities; help consumers make informed decisions about their insurance options; and help consumers access individual and SHOP exchange coverage and cost-sharing assistance or public program coverage (e.g., Medicaid or CHIP) if they qualify. Although consumer assistance personnel (including Navigators and CACs) can help consumers and small employers understand their options, the assistors may not advise them on which plan to select. Once consumers or small employers choose a plan, assisters may help them enroll in coverage. Neither Navigators nor CACs may be health issuers or take compensation from issuers or consumers for selling health policies.⁴⁴

Pursuant to state law, exchanges also may allow insurance agents and brokers, including web-based brokers, to help consumers and small employers obtain coverage through exchanges.⁴⁵ Brokers and agents are licensed by the states and generally are paid on a commission basis by insurance companies.

Besides facilitating in-person assistance, exchanges also must provide for the operation of a call center and maintain a website that meets certain informational requirements.⁴⁶ Overall, exchanges' consumer outreach efforts and materials must meet certain standards regarding accessibility for individuals with disabilities or with limited English proficiency.⁴⁷

Administering the Exchanges

In addition to carrying out their consumer-facing activities that facilitate the purchase of coverage, exchanges are responsible for several administrative functions, including certifying the plans that will participate in their marketplaces.⁴⁸ SBEs, SBE-FPs, and state entities in some FFEs (where states have chosen to perform some plan-management functions) are each responsible for annually certifying or recertifying plans to be sold in their exchanges as qualified health plans (QHPs, see "Qualified Health Plans," below). In FFEs in which HHS oversees all plan-related functions, CMS does this for each state.

QHP certification involves a review of various factors, including the benefits a plan will cover, the network of providers it will include, its premium rates, its marketing practices, and its adherence to quality-of-care standards.⁴⁹ The QHP certification process is to be completed each year in time for issuers to advertise their plans and rates during the exchanges' annual OEP.

Exchanges' other administrative activities include collecting enrollment and other data, reporting data to and otherwise interacting with the Departments of HHS and the Treasury, and working with state insurance departments and federal regulators to conduct ongoing oversight of plans.

Qualified Health Plans

In general, health insurance plans offered through exchanges must be QHPs.⁵⁰A QHP is a plan that is offered by a state-licensed issuer that meets specified requirements, is certified by an exchange, and covers the essential health benefits (EHB) package.⁵¹ The EHB package requires plans to cover 10 broad categories of benefits and services, comply with limits on consumer cost sharing on the EHB, and meet certain generosity requirements.⁵²

QHPs must comply with the same state and federal requirements that apply to health plans offered outside of exchanges.⁵³ A QHP offered through an individual exchange must comply with state and federal requirements applicable to individual market plans; a QHP offered through a SHOP exchange must comply with state and federal requirements applicable to plans offered in the small-group market. For example, QHPs offered through individual and SHOP exchanges must cover specified preventive services without imposing cost sharing, just like plans offered in the individual and small-group markets outside of exchanges.

A QHP is the only type of comprehensive health plan an exchange may offer, but QHPs may be offered outside of exchanges, as well.

Types of QHPs and Other Plans Offered Through Exchanges

Most plans offered in the exchanges are QHPs, including child-only plans, catastrophic plans, consumer operated and oriented plans (CO-OPs), and multi-state plans (MSPs). Stand-alone dental plans are the only non-QHPs offered in the exchanges. Some plans that are available in the exchanges also are available off the exchanges.

The types of plans that may be available through exchanges are summarized in Table B-1. Exchange Funding

The ACA provided an indefinite (i.e., unspecified) appropriation for HHS grants to states to support the planning and establishment of exchanges.⁵⁴ For each fiscal year between FY2011 and FY2014, the HHS Secretary determined the total amount that was made available to each state for exchange grants. However, none of these exchange grants could be awarded after January 1, 2015, and exchanges were expected to be self-sustaining beginning in 2015.

Exchanges may generate funding to sustain their operations, including by assessing fees on participating health insurance plans.⁵⁵ To raise funds for the exchanges it oversees, HHS assesses a monthly fee on each health insurance issuer that offers plans through an FFE or SBE-FP. The fee is a percentage of the value of the monthly premiums that the issuer collects on exchange plans in a given state, and HHS updates the percentage each year through rulemaking. (See Table 2.) Currently, these user fees are the primary source of funding for FFEs; they are estimated to account for 70% of all FFE funding in FY2018.⁵⁶

Most SBEs also assess user fees on issuers participating in their exchanges, often 1%-3% of premiums or a monthly flat fee.⁵⁷ States also can use other state funding to support their exchanges, and some have become FFEs or moved to the federal IT platform due to challenges and/or costs of maintaining their exchanges.⁵⁸

User fees also have been assessed on issuers participating in SHOP exchanges. However, in the 2019 Payment Notice, HHS announced that the fees won't be assessed for issuers selling plans under the new model of reduced federal IT support (see "Changes in SHOP Exchange Web Portal Functionality" in this report).

Table 2. "User Fee" Assessed Monthly on Issuers Participating in Exchanges, by Year

(fee is the stated percentage of the value of monthly premiums collected by issuer on exchange plans)

 

PY 2014

PY 2015

PY 2016

PY 2017

PY 2018

PY 2019

FFE Issuers

3.5%

3.5%

3.5%

3.5%

3.5%

3.5%

SBE-FP Issuers

n/a

n/a

n/a

1.5%

2%

3%

Sources: CRS analysis of federal regulations: HHS, "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017 [2017 Payment Notice]," Final Rule, 81 Federal Register 12203, March 8, 2016. See pages 12293-12295.HHS, "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program [2018 Payment Notice]," Final Rule, 81 Federal Register 94058, December 22, 2016. See pages 94138-94139.HHS, "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2019 [2019 Payment Notice]," Final Rule, 83 Federal Register 16930, April 17, 2018. See pages 17006-17007. Notes: PY = plan year. FFE = federally-facilitated exchange. SBE = state-based exchange. SBE-FP = state-based exchange using the federal information technology (IT) platform. See "Types of Exchanges" in this report for a description of exchange types. n/a = Although some SBE-FPs existed prior to plan year 2017, HHS did not begin assessing a user fee on issuers in those states until then.SBEs' assessment of user fees, if any, varies, as discussed in this section of the report. Further Reading

For more information about certain issues addressed in or relevant to this report, see the following CRS reports:

• CRS Report R45146, Federal Requirements on Private Health Insurance Plans
• CRS Report R44425, Health Insurance Premium Tax Credits and Cost-Sharing Subsidies
• CRS Report R44438, The Individual Mandate for Health Insurance Coverage: In Brief

Appendix A. Exchange Types by State Table A-1. Exchange Types by State, Plan Year 2018

State

Individual Exchange

SHOP Exchange

Are the State's Individual and SHOP Exchanges the Same Type?

Alabama

FFE

FF-SHOP

Yes

Alaska

FFE

FF-SHOP

Yes

Arizona

FFE

FF-SHOP

Yes

Arkansas

SBE-FP

SB-SHOP^a

No

California

SBE

SB-SHOP

Yes

Colorado

SBE

SB-SHOP^a

Yes

Connecticut

SBE

SB-SHOP

Yes

Delaware

FFE^b

FF-SHOP

Yes

District of Columbia

SBE

SB-SHOP

Yes

Florida

FFE

FF-SHOP

Yes

Georgia

FFE

FF-SHOP

Yes

Hawaii

FFE

No SHOP exchange^c

No

Idaho

SBE

SB-SHOP^a

Yes

Illinois

FFE^b

FF-SHOP

Yes

Indiana

FFE

FF-SHOP

Yes

Iowa

FFE^b

FF-SHOP

Yes

Kansas

FFE

FF-SHOP

Yes

Kentucky

SBE-FP

SB-FP-SHOP

Yes

Louisiana

FFE

FF-SHOP

Yes

Maine

FFE

FF-SHOP

Yes

Maryland

SBE

SB-SHOP

Yes

Massachusetts

SBE

SB-SHOP

Yes

Michigan

FFE^b

FF-SHOP

Yes

Minnesota

SBE

SB-SHOP^a

Yes

Mississippi

FFE

SB-SHOP

No

Missouri

FFE

FF-SHOP

Yes

Montana

FFE

FF-SHOP

Yes

Nebraska

FFE

FF-SHOP

Yes

Nevada

SBE-FP^d

SB-FP-SHOP

Yes

New Hampshire

FFE^b

FF-SHOP

Yes

New Jersey

FFE

FF-SHOP

Yes

New Mexico

SBE-FP

SB-SHOP

No

New York

SBE

SB-SHOP^a

Yes

North Carolina

FFE

FF-SHOP

Yes

North Dakota

FFE

FF-SHOP

Yes

Ohio

FFE

FF-SHOP

Yes

Oklahoma

FFE

FF-SHOP

Yes

Oregon

SBE-FP

SB-SHOP^a

No

Pennsylvania

FFE

FF-SHOP

Yes

Rhode Island

SBE

SB-SHOP

Yes

South Carolina

FFE

FF-SHOP

Yes

South Dakota

FFE

FF-SHOP

Yes

Tennessee

FFE

FF-SHOP

Yes

Texas

FFE

FF-SHOP

Yes

Utah

FFE

FF-SHOP^e

Yes

Vermont

SBE

SB-SHOP^a

Yes

Virginia

FFE

FF-SHOP

Yes

Washington

SBE

SB-SHOP^a

Yes

West Virginia

FFE^b

FF-SHOP

Yes

Wisconsin

FFE

FF-SHOP

Yes

Wyoming

FFE

FF-SHOP

Yes

TOTAL: 51

FFE: 34

SBE: 12

SBE-FP: 5

FF-SHOP: 32

SB-SHOP: 16

SB-FP-SHOP: 2

No SHOP: 1

Yes: 46

No: 5

Sources: Congressional Research Service (CRS) illustration based on data from the following sources: Individual exchange types: Centers for Medicare & Medicaid Services (CMS), "2018 Marketplace Open Enrollment Period Public Use Files: 2018 OEP State-Level Public Use File," April 18, 2018, at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Marketplace-Products/Downloads/2018_OE_State.zip. SHOP exchange types: Kaiser Family Foundation, "State Health Insurance Marketplace Types, 2018," at https://www.kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/; verified at Healthcare.gov at https://www.healthcare.gov/small-businesses/employers/. Notes: SHOP = Small business health options program. FFE and FF-SHOP = Federally facilitated individual exchange; federally facilitated SHOP exchange. SBE and SB-SHOP = State-based individual exchange; state-based SHOP exchange. SBE-FP and SB-FP-SHOP = State-based individual exchange using the federal information technology (IT) platform; state-based SHOP exchange using the federal IT platform. Counts of "states" include the District of Columbia. In the individual exchanges, "plan year" is generally that calendar year, but group coverage plan years, including in the SHOP exchanges, may start at any time during a calendar year. See "Types of Exchanges" in this report for discussion of the different exchanges. See Figure 1in this report for the exchange types by state in map form. a. In these SB-SHOP states, the SHOP web portal is using or transitioning to a direct enrollment approach: it does not offer online enrollment but instead instructs users to connect with agents or brokers offering plans through the state's SHOP exchange, or outside of it if there are no plans offered in the state's SHOP exchange. Idaho, Oregon, and Vermont have only or primarily used a direct enrollment approach. New York and Connecticut do not appear to have an online enrollment portal but do allow small businesses to compare plans online and either mail in an enrollment form or enroll with an agent or broker. The SHOP webpages of Arkansas, Minnesota, and Washington report that because no issuers have offered SHOP plans in 2018, they will transition current SHOP plan holders to direct relationships with agents or brokers to discuss renewal in off-exchange coverage. Contact report author for sources. b. In many FFE states, the federal government performs all functions. But in these FFE states, the state partners with the federal government to perform some functions. CMS data do not identify these "partnership" variations, but the Kaiser Family Foundation tracks them at the site linked above. c. Hawaii received an ACA Section 1332 waiver allowing it not to operate a SHOP exchange. See State of Hawaii, Department of Labor and Industrial Relations, "ACA Small-Business Health Options Program (SHOP)—Waiver Approved on 12/30/2016," at http://labor.hawaii.gov/aca-smallbiz/. For more information on Section 1332 waivers, see CRS Report R44760, State Innovation Waivers: Frequently Asked Questions. d. However, Nevada appears to be transitioning from an SBE-FP to an SBE. See National Association for State Health Policy, "Nevada's Insurance Exchange Director Talks about Transitioning to a State-Based Marketplace and Saving Millions," April 24, 2018, at https://nashp.org/nevadas-insurance-exchange-director-heather-korbulic-talks-about-transitioning-to-a-state-based-marketplace/. e. Effective 2018, Utah has transitioned from an SB-SHOP to an FF-SHOP. See Utah Governor's Office of Economic Development, Avenue H Health Insurance Exchange, "Small Businesses," at https://avenueh.com/businesses, accessed June 1, 2018. Appendix B. Types of Plans Offered Through the Exchanges Table B-1. Types of Plans Offered Through the Exchanges  

Summary

Can Use Premium Tax Credits or Cost-Sharing Reductions?

Can Be Offered Outside Exchanges?

Qualified Health Plan (QHP)

A plan that is offered by a state-licensed issuer that meets specified requirements, is certified by an exchange, and covers the essential health benefits (EHB) package.

Yes

Yes

QHP Variations

Child-Only Health Insurance Plan

A plan in which only individuals under the age of 21 may enroll. If an issuer offers an all-ages QHP in an exchange, it also must offer a child-only plan at the same actuarial level.

Yes

Yes

Catastrophic Plan

A plan that provides the EHB and coverage for at least three primary care visits; however, it does not meet the minimum requirements related to coverage generosity (i.e., actuarial value). Offered in individual but not small business health options program (SHOP) exchanges. Consumer eligibility requirements apply.^a

No

Yes

Consumer Operated and Oriented Plan (CO-OP)

A plan sold by a nonprofit, member-run health insurance company created via a Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) program.^b

Yes

Yes

Multi-state Plan (MSP)

A plan sold in the exchanges under contract with the federal Office of Personnel Management (OPM).^c

Yes

No

Non-QHPs

Dental-Only Plan

Coverage for dental care. May be offered either as a stand-alone plan or in conjunction with a QHP, as long as it covers pediatric dental benefits that meet relevant EHB requirements.

Yes, in certain circumstances.

Yes

Sources: CRS analysis of statute and regulation. QHP definition: 42 U.S.C. §18021. Child-only and catastrophic plans: 42 U.S.C. §18022. CO-OPs: 42 U.S.C. §18021 and 42 U.S.C. §18042. MSPs: 42 U.S.C. §18021 and 42 U.S.C. §18054. Dental-only plans: 42 U.S.C. §18031(d)(2)(B)(ii), 45 C.F.R. §155.1065, and 45 C.F.R. §155.705. Premium tax credits and cost-sharing reductions: 26 U.S.C. §36B(c)(3)(A) and 42 U.S.C. §18071(f)(1).

Notes:

a. Catastrophic plans are available only to individuals under the age of 30 and individuals who obtain hardship or affordability exemptions from the ACA's individual mandate to maintain minimum essential coverage or pay a penalty. See CRS Report R44438, The Individual Mandate for Health Insurance Coverage: In Brief. b. The HHS Secretary is required to use funds appropriated to the CO-OP program to finance start-up and solvency loans for eligible nonprofit organizations applying to become a CO-OP. The majority of products offered by a CO-OP must be QHPs sold in the non-group and small-group markets, including through exchanges. c. The ACA directs OPM to contract with private issuers in each state to offer at least two QHPs under the MSP program. The term multi-state plan is meant to indicate that this program extends across the states, not that the plans themselves are necessarily interstate.

Author Contact Information

Footnotes

1.

In this report, the terms consumers and individuals generally are used interchangeably, as are small businesses and small employers.

2.

The term individual exchange is used for purposes of this report. It is not defined in exchange-related statute or regulations.

3.

The individual, or non-group, market refers to insurance policies offered to individuals and families buying insurance on their own (i.e., not through an employer or other plan sponsor).

4.

Small businesses and the small-group market are defined later in this report, in "SHOP Exchanges."

5.

In tallies throughout this report, the District of Columbia (DC) is counted as a state.

6. This report focuses on the three types of exchanges as classified by the Centers for Medicare & Medicaid Services (CMS) in its reports of enrollment data (see Figure 1), but other entities may track additional variations. For example, see Kaiser Family Foundation (KFF), "State Health Insurance Marketplace Types, 2018," at https://www.kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/. 7.

As of April 2018, states can no longer select the state-based using the federal IT platform (SB-FP-SHOP) approach, except that the two such current states may maintain the model. See "Changes in SHOP Exchange Web Portal Functionality" in this report for more information.

8.

Hawaii received a Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) Section 1332 waiver exempting it from operating a small business health options program (SHOP) exchange. See "Changes in SHOP Exchange Web Portal Functionality" in this report for more information.

9.

42 U.S.C. §18031(b)(1)(A).

10.

State residency may be established through a variety of means, including actual or planned residence in a state, actual or planned employment in a state, and other circumstances. See 45 C.F.R. §155.305.

11.

U.S. citizens and U.S. nationals are eligible for coverage through the exchanges. "Lawfully present" immigrants are also eligible for coverage through the exchanges. Examples of "lawfully present" immigrants include those who have "qualified non-citizen" immigration status without a waiting period, humanitarian statuses or circumstances, valid non-immigrant visas, and legal status conferred by other laws. See 45 C.F.R. §155.305 and Healthcare.gov, "Coverage for Lawfully Present Immigrants," at https://www.healthcare.gov/immigrants/lawfully-present-immigrants/.

12.

45 C.F.R. §155.410.

13.

The CMS "2018 Marketplace Open Enrollment Period Public Use Files" include a list of state-based exchange open enrollment periods that extended beyond the standard period. See https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Marketplace-Products/2018_Open_Enrollment.html.

14.

45 C.F.R. §155.420.

15.

Qualifying coverage generally means the types of minimum essential coverage (MEC) that are identified in the Internal Revenue Code (IRC) Section 5000A and its implementing regulations. Most types of comprehensive coverage are considered MEC, including public coverage (e.g., Medicaid, Medicare), as well as private insurance (e.g., employer-sponsored insurance and non-group insurance). For other types of coverage losses that can trigger a special enrollment period (SEP), see 45 C.F.R. §155.420.

16.

For example, in 2014, the Department of Health and Human Services (HHS) established an SEP due to technical problems submitting insurance applications through the federal information technology platform (i.e., HealthCare.gov). In 2015, HHS established an SEP around tax season for individuals who had not enrolled in 2015 coverage and were subject to the 2014 individual mandate penalty. For 2018 coverage, HHS established an SEP for consumers in states that were affected by the 2017 hurricanes or other severe weather events. See, for example, Healthcare.gov, "Special Enrollment Periods for Complex Issues," at https://www.healthcare.gov/sep-list/.

17.

For more information about consumer financial assistance, including applicable eligibility criteria and illustrative examples, see CRS Report R44425, Health Insurance Premium Tax Credits and Cost-Sharing Subsidies.

18.

Certain large employers could be subject to penalties if they do not offer minimum essential coverage (discussed at footnote 15) to full-time employees and their dependents. For more information, see CRS Report R43981, The Affordable Care Act's (ACA) Employer Shared Responsibility Determination and the Potential Employer Penalty.

19 increases from 10 to 25 and as average employee compensation increases.

For more information about the small business health insurance tax credit, see CRS Report R41158, Summary of the Small Business Health Insurance Tax Credit Under ACA.

Exchange Plans

Qualified Health Plans

The ACA generally requires that health insurance plans offered through exchanges are Qualified Health Plans (QHPs). Typically in order to be a certified as a QHP a plan has to offer the essential health benefits (EHB), comply with cost-sharing limits, and meet certain market reforms. Each exchange is responsible for certifying the plans it offers. However, QHPs can be offered both inside the health insurance exchanges and outside the exchanges on the private health insurance market.

Essential Health Benefits

All QHPs are required to offer a core package of health care services, known as the essential health benefits. The ACA does not specifically define this core package but rather lists 10 benefit categories and requires the HHS Secretary to further define the EHB (see Figure 2).

For 2014-2017, the HHS Secretary outlined a process where each state identified a single plan, the EHB-benchmark plan, which serves as a reference plan for all QHPs in that state. Accordingly, QHPs must base their benefits package on their state's EHB-benchmark plan. Given that each state has its own EHB-benchmark plan and given other market factors, QHPs available in the health insurance exchanges will vary in terms of specific covered services as well as benefit amount, duration, and scope.

For more information on the essential health benefits, see CRS Report R44163, The Patient Protection and Affordable Care Act's Essential Health Benefits (EHB).

Figure 2. The 10 Essential Health Benefits

Source: 42 U.S.C. §18022.

Cost Sharing

QHPs must follow established limits on consumer cost sharing. The ACA imposes limits on consumers' cost-sharing requirements for the EHB. The limits work in two ways: they prohibit (1) applying deductibles to preventive health services and (2) annual out-of-pocket limits that exceed existing limits in the federal tax code.¹³ In 2016, the cost-sharing limit is $6,850 for an individual plan and $13,700 for a family plan.¹⁴ For 2017, the cost-sharing limit is $7,150 for an individual plan and $14,300 for a family plan.¹⁵

Actuarial Value

The ACA requires QHPs to tailor cost sharing to comply with one of the four levels of actuarial value (AV) (see Figure 3). AV is a summary measure of a plan's generosity of coverage. It is expressed as the percentage a given health insurance plan will pay for covered medical expenses, for a standard population. On average, as AV increases, consumer cost sharing decreases. For example, for a silver-level plan, on average, a plan pays for 70% of covered services and a consumer pays for 30% of the expenses out-of-pocket.

Figure 3. Actuarial Value Levels

Source: 42 U.S.C. §18022.

Market Reforms

A number of ACA provisions focus on changing how health insurance plans offer coverage. Collectively, the market reforms establish federal minimum requirements regarding access to coverage, premiums, benefits, cost sharing, and consumer protections while generally giving states the authority to enforce the reforms and the ability to expand on the reforms.¹⁶ Some of the reforms apply to all three segments of the private insurance market (nongroup, small-group, and large-group markets). But many of the reforms focus specifically on the nongroup and small-group insurance markets, both inside and outside the exchanges.

These same market reforms apply to QHPs offered in the individual and SHOP exchanges. The reforms are intended to address perceived failures in the nongroup and small-group markets—such as limited access to coverage and higher costs of coverage—and to provide some parity with the large-group market, which may already have many of these features. The reforms generally address issues related to obtaining coverage, keeping coverage, the cost of purchasing coverage, covered benefits and services, cost-sharing limits, plan requirements, and consumer protections (some of which were discussed earlier in this report).

For more information about the market reform provisions in the ACA, see CRS Report R42069, Private Health Insurance Market Reforms in the Patient Protection and Affordable Care Act (ACA).

Other Types of Plans Offered Through Exchanges

While all health insurance plans offered through the exchanges must generally be certified QHPs, the exchanges also offer variants of QHPs and a few non-QHPs as allowed under the ACA. These QHP variants and non-QHPs are described below.

Child-Only Plans

Child-only health insurance plans are a type of QHP available in the exchanges. In order to offer child-only plans in an exchange, a health insurance plan must also offer a QHP in the exchange. The ACA requires the plan to offer the child-only exchange plan at the same level as the QHP. Only individuals under age 21 may enroll in child-only exchange plans.

Multi-State Plans

The ACA directs the Office of Personnel Management to contract with private insurance plans in each state to offer at least two comprehensive health insurance options, known as multi-state plans (MSPs). MSPs are designed to offer nationally available QHPs through the exchanges; MSPs are not available outside the exchanges. Individuals enrolled in MSP options have access to the same financial assistance for premium tax credits and cost-sharing subsidies as consumers in other plans.

Consumer Operated and Oriented Plans

The ACA includes the Consumer Operated and Oriented Plan (CO-OP) program to create nonprofit, member-run health insurance companies. The HHS Secretary is required to use funds appropriated to the CO-OP program to finance start-up and solvency loans for eligible nonprofit organizations applying to become a CO-OP. The majority of the products offered by a CO-OP must be QHPs sold in the nongroup and small-group markets, including through exchanges.¹⁷

Catastrophic Plans

The ACA establishes other plans that are not QHPs. One such plan is a catastrophic plan. A catastrophic plan offered through exchanges provides the EHB and coverage for at least three primary care visits; however, it imposes very high deductibles and does not meet the minimum requirements related to coverage generosity (i.e., actuarial value).¹⁸ Catastrophic plans may be offered only in the individual market for (1) individuals under age 30, and (2) persons exempt from the ACA requirement to obtain health coverage (described below) because no affordable coverage is available or they have a hardship exemption.¹⁹ Premium tax credits and cost-sharing subsidies may not be used toward catastrophic plans.

Dental-Only Plans

Dental-only plans are another type of non-QHP that may be offered in exchanges. Dental plans may be offered either as stand-alone plans or in conjunction with QHPs. Premium tax credits and cost-sharing subsidies may not be used toward dental-only plans.

Exchange Enrollment

Measuring exchange enrollment can be difficult. Given the exchange eligibility determination process as well as the OEPs and SEPs, data on exchange enrollment are released in stages—pre-effectuated and effectuated enrollment.

Pre-effectuated enrollment is the number of unique individuals who have been determined eligible to enroll in an exchange plan and have selected a plan. These individuals may or may not have submitted the first premium payment. Subsequently, effectuated enrollment is the number of unique individuals who have been determined eligible to enroll in an exchange plan, have selected a plan, and have submitted the first premium payment for an exchange plan.

Effectuated enrollment estimates, however, may change over time. For example, due to changes in life circumstances, an individual may un-enroll (e.g., because he or she was later offered coverage through an employer) or enroll (e.g., because he or she was eligible for an SEP) in an exchange plan. Accordingly, exchange enrollment estimates are often reported for a particular time frame.

HHS regularly releases data on exchange enrollment. For the most current enrollment estimates, see the HHS website.²⁰

Status of Exchange Implementation

This section provides a brief summary of the implementation and operation of exchanges since 2014.

2014 Coverage Year

As required by the ACA, 2014 was the first year in which health insurance coverage was available through exchanges in every state. In 2014, for the individual exchanges, 17 states had SBEs, while 34 states had FFEs. Among SHOP exchanges, 19 were SBEs and 32 were FFEs.

The OEP for 2014 coverage for all exchanges began October 1, 2013. The FFEs and some SBEs experienced difficulties related to the functionality of their websites during the OEP. In many cases, the problems hindered consumers' and small businesses' ability to purchase health plans offered through exchanges. Additionally, implementation of certain features of exchanges, particularly for SHOP exchanges, was delayed for part or all of 2014. For example, small businesses using federally-facilitated SHOP exchanges were not able to purchase coverage online during any part of 2014.

One way in which HHS responded to the problems and delays was to find ways to provide access to exchange coverage to consumers and small businesses. HHS extended the OEP, identified alternative ways to enroll in coverage available through exchanges, and shortened the length of time between when an individual signed up for coverage and the date when the coverage began.

By the end of the 2014 OEP (October 1, 2013, through March 31, 2014) and an SEP (through April 19, 2014), the pre-effectuated enrollment²¹ for the individual exchanges in all states and DC was approximately 8.0 million individuals.²² On October 15, 2014, the effectuated enrollment in the individual exchanges was approximately 6.7 million individuals.²³ An estimate for nationwide enrollment in the SHOP exchanges in 2014 was never released.

2015 Coverage Year

The overall number of states with state-based and federally-facilitated individual and SHOP exchanges did not change between 2014 and 2015.

The OEP for 2015 coverage began November 15, 2014. Overall, the exchanges had fewer operational difficulties in 2015, particularly with respect to IT infrastructure. This was the case for both state-based and federally-facilitated exchanges.

By the end of the 2015 OEP (November 15, 2014, through February 15, 2015) and an SEP (through February 22, 2015), the pre-effectuated enrollment for the individual exchanges in all states and DC was approximately 11.7 million individuals.²⁴ On December 31, 2015, the effectuated enrollment in the individual exchanges was approximately 8.8 million individuals.²⁵ As of May 2015, enrollment in the SHOP exchanges was approximately 85,000 individuals.²⁶

The exchanges experienced different challenges in 2015. For SBEs, one of those challenges was obtaining funds to sustain operations. As noted earlier in this report, exchanges were expected to be self-sustaining and could no longer obtain federal exchange grants beginning in 2015. The ACA provides that an exchange may charge an assessment or user fee to participating health plans but also allows an exchange to find other ways to generate funds to sustain its operations. Some SBEs projected funding shortfalls for their exchanges and sought ways to secure more funding and reduce operating costs.²⁷

2016 Coverage Year

Between 2015 and 2016, the only state to change its exchange type was Hawaii, which went from a state-based exchange to a state-based exchange using the federal IT platform (i.e., HealthCare.gov).

By the end of the 2015 OEP (November 1, 2015, through January 31, 2016) the pre-effectuated enrollment for the individual exchanges in all states and DC was approximately 12.7 million individuals.²⁸ As of March 31, 2016, the effectuated enrollment in the individual exchanges was approximately 11.1 million individuals.²⁹ Updated SHOP enrollment estimates have not yet been released.

In 2016, SBEs continue to explore avenues to become self-sustaining. Discussion among states continues about the type of exchange platform they utilize, particularly the advantages and disadvantages of an SBE, an SBE using the federal IT platform, and an FFE. Given the costs associated with developing and maintaining an eligibility and enrollment platform, the use of the existing federal IT platform may be an option for SBEs with limited resources. States that have the resources, political support, and desire to remain autonomous, however, may decide to employ their own IT platforms, which are often considered to be more responsive to specific state needs and to have more flexibility compared to states using the federal IT platform.³⁰

Additional Resources

For more information on topics related to the health insurance exchanges and other ACA private health insurance provisions, the table below includes a selection of CRS reports that may be of interest.

Footnotes

A business with locations or employees in multiple states has options for offering SHOP coverage to all its eligible employees. See 45 C.F.R. §155.710 and Healthcare.gov, "SHOP Coverage for Multiple Locations and Businesses," at https://www.healthcare.gov/small-businesses/provide-shop-coverage/business-in-more-than-one-state/. See Table A-1 for states that are using or transitioning to the direct enrollment approach for small businesses to obtain coverage within or outside of their SHOP exchanges, based on CRS analysis of state-based SHOP exchange websites linked from Healthcare.gov at https://www.healthcare.gov/small-businesses/employers/. Contact report author for specific sources. This estimate excludes Vermont and Idaho; these states had not reported 2015 enrollment data to CMS. See CMS, "Update on SHOP Marketplaces for Small Businesses," July 2, 2015, archived at http://wayback.archive-it.org/2744/20170118124128/https:/blog.cms.gov/2015/07/.

U.S. Government Accountability Office, Health Insurance Marketplaces: CMS Needs to Improve Its Oversight of State IT Systems' Sustainability and Performance, GAO-17-258, August 15, 2017. Also see Justin Giovannelli and Ken Lucia, "The Experiences of State-Run Insurance Marketplaces That Use HealthCare.gov," The Commonwealth Fund, September 2015, at http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2015/sep/1840_giovannelli_experiences_states_use_healthcaregov_rb_v2.pdf.

1.	The term individual exchange is used for purposes of this report. It is not defined in exchange-related statute or regulations.
2.	As defined by the Department of Health and Human Services (HHS) classification of exchange types. HHS, Health Insurance Marketplaces 2016 Open Enrollment Period: Final Enrollment Report, March 11, 2016, at https://aspe.hhs.gov/sites/default/files/pdf/187866/Finalenrollment2016.pdf.
3.	For detailed information about how agents and brokers can interact with exchanges, see Centers for Medicare & Medicaid Services (CMS), Center for Consumer Information & Insurance Oversight, "Resources for Agents and Brokers in the Health Insurance Marketplaces," at http://www.cms.gov/cciio/programs-and-initiatives/health-insurance-marketplaces/a-b-resources.html.
4.	State residency may be established through a variety of means, including actual or planned residence in a state, actual or planned employment in a state, and other circumstances. See 45 C.F.R. §155.305.
5.	U.S. citizens and U.S. nationals are eligible for coverage through the exchange. "Lawfully present" immigrants are also eligible for coverage through the exchange. Examples of "lawfully present" include immigrants who have "qualified non-citizen" immigration status without a waiting period, humanitarian statuses or circumstances, valid non-immigrant visas, and legal status conferred by other laws.
6.	HHS may also establish special enrollment periods (SEPs) for other circumstances. For example, in 2014, HHS established an SEP due to technical problems submitting insurance applications through the federal IT platform (i.e., HealthCare.gov). Also, in 2015, HHS established an SEP around tax season for individuals who had not enrolled in 2015 coverage and were subject to the 2014 individual mandate penalty.
7.	For more information on employer requirements for offering employment-based coverage, see CRS Report R43981, The Affordable Care Act's (ACA) Employer Shared Responsibility Determination and the Potential Employer Penalty.
8.	Cost sharing is the share of costs an insured individual pays for services out-of- of pocket. The term often includes deductibles, coinsurance, and co-payments. A deductibledeductible is the amount an insured individual pays before his or her health insurance plan begins to pay for most services. CoinsuranceCoinsurance is the share of costs, figured in percentage form, an insured individual pays for a health service. A co-payment is a fixed amount an insured individual pays for a health service. An out-of-pocket limit or maximum means that once a consumer has paid that amount in a policy year, the issuer will pay 100% of covered costs for the remainder of the policy year.
920.	For more information about the annual out-of-pocket limits, see "Cost Sharing" section of this report.
10.	This requirement applies to the small-group market operating outside of SHOP exchanges as well. Prior to the ACA, most states defined small as businesses having 50 or fewer employees. Under the ACA, the definition of small was set to expand to businesses having 100 or fewer employees beginning 2016. However, President Obama signed into law the Protecting Affordable Coverage for Employees Act (PACE Act; P.L. 114-60) to rescind the ACA's expanded definition of small subject to the rules of the small-group market in the state.
11.	To date, California, Colorado, New York, and Vermont are the only states that define small businesses as having 100 or fewer employees.
12.	It is possible for SHOP exchanges to establish minimum participation rates and minimum contribution rates. Businesses that do not comply with established rates cannot be prohibited from obtaining coverage through SHOP exchanges; rather, health insurance plans may limit the availability of coverage for any employer that does not meet an allowed minimum participation or contribution rate to an annual enrollment period—November 15 through December 15—of each year.
13.	The existing limits are those that are applicable to high-deductible health plans that qualify to be paired with tax-advantaged health savings accounts. For more information about these plans, see CRS Report RL32237, Health Insurance: A Primer.
14.	HHS "Patient Protection and Affordable Care Act: HHS Notice of Benefit and Payment Parameters for 2016," 80 Federal Register 10750-10877, February 27, 2015.
15.	HHS, "Patient Protection and Affordable Care Act: HHS Notice of Benefit and Payment Parameters for 2017," 81 Federal Register 12204-12352, March 8, 2016.
16.	Private health insurance is primarily regulated at the state level. The ACA establishes uniform requirements and additional options for all states.
17.	For more information about CO-OPs and their current operating status, see CRS Report R44414, Consumer Operated and Oriented Plan (CO-OP) Program: Frequently Asked Questions.
18.	While catastrophic plans technically do not meet the generosity requirements for coverage, a catastrophic plan may be considered as meeting such coverage generosity requirements so long as it meets the other catastrophic plan requirements described above.
19.	Individuals who suffer a hardship with respect to the capability to obtain health insurance coverage may receive hardship exemptions. HHS has identified a number of circumstances that allow individuals to receive hardship exemptions. For more information on hardship exemptions, see CRS Report R41331, Individual Mandate Under the ACA.
20.	HHS, "Health Care," at http://www.hhs.gov/healthcare/index.html.
21.	For a discussion about the differences between pre-effectuated and effectuated enrollment, see "Exchange Enrollment" section of this report.
22.	HHS, Health Insurance Marketplace: Summary Enrollment Report for the Initial Annual Open Enrollment Period, May 1, 2014, at http://aspe.hhs.gov/health/reports/2014/marketplaceenrollment/apr2014/ib_2014apr_enrollment.pdf.
23.	HHS, How Many Individuals Might Have Marketplace Coverage After the 2015 Open Enrollment Period, November 10, 2014, at http://aspe.hhs.gov/health/reports/2014/Targets/ib_Targets.pdf.
24.	HHS, Health Insurance Marketplaces 2015 Open Enrollment Period: March Enrollment Report, March 10, 2015, at https://aspe.hhs.gov/sites/default/files/pdf/83656/ib_2015mar_enrollment.pdf.
25.	Centers for Medicare & Medicaid Services, December 31, 2015 Effectuated Enrollment Snapshot, March 11, 2016, at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-03-11.html.
26.	This estimate excludes Vermont and Idaho; these states had not reported 2015 enrollment data to CMS. CMS, Update on SHOP Marketplaces for Small Businesses, July 2, at https://blog.cms.gov/2015/07/02/update-on-shop-marketplaces-for-small-businesses/#_ftn1.
27.	Lena H. Sun and Niraj Chokshi, "Almost Half of Obamacare Exchanges Face Financial Struggles in the Future," Washington Post, May 1, 2015.
28.	HHS, Health Insurance Marketplaces 2016 Open Enrollment Period: Final Enrollment Report, March 11, 2016, at https://aspe.hhs.gov/sites/default/files/pdf/187866/Finalenrollment2016.pdf.
29.	Centers for medicare & Medicaid Services, March 31, 2016 Effectuated Enrollment Snapshot, June 30, 2016, at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-06-30.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=descending.
30.	Justin Guivannelli and Ken Lucia, "The Experiences of State-Run Insurance Marketplaces That Use HealthCare.gov," The Commonwealth Fund, September 2015, at http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2015/sep/1840_giovannelli_experiences_states_use_healthcaregov_rb_v2.pdf. The ACA requires the HHS Secretary to provide full reimbursements to issuers that provide these cost-sharing subsidies to their enrollees. However, the ACA did not appropriate funds for such payments. In October 2017, the Trump Administration halted these payments, effective immediately, until Congress appropriates funds. Issuers still must provide the subsidies to eligible consumers, but issuers are not reimbursed. See HHS, "Payments to Issuers for Cost-Sharing Reductions," October 12, 2017, at https://www.hhs.gov/sites/default/files/csr-payment-memo.pdf.
21.	HHS, "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2019 [2019 Payment Notice]," Final Rule, 83 Federal Register 16930, April 17, 2018. This rule set the cost-sharing limits for 2019 and also references the 2018 limits.
22.	The annual out-of-pocket limits and the actuarial value requirements that apply to all plans are discussed again in the section on "Qualified Health Plans."
23.	Small employer and large employer are defined at 45 C.F.R. §144.103. States' definitions of small vs. large employers apply to their small-group market operating outside of SHOP exchanges as well, and they determine the relevance of any federal requirements that apply differently to small and large employers (e.g., large group plans are not subject to the requirement to cover the essential health benefits). See CRS Report R45146, Federal Requirements on Private Health Insurance Plans.
24.	California, Colorado, New York, and Vermont are the only states that define small businesses as having 100 or fewer employees for the purpose of participation in the SHOP exchanges. See National Conference of State Legislatures, "Small and Large Business Health Insurance: State & Federal Roles," updated July 15, 2017, at http://www.ncsl.org/research/health/small-business-health-insurance.aspx. Verified by CRS report author on the SHOP website of each SB-SHOP on April 2, 2018. Contact report author for all sources.
25.	42 U.S.C. §18032(f)(2)(B). No states have allowed large employers (as defined by the state) use of their SHOP exchanges. See footnote 24 for the four states that allow participation by small employers with up to 100, instead of up to 50, eligible employees.
26.	The definition of full-time employee is at 45 C.F.R. §155.20.
27.
28.	45 C.F.R. §155.705(b)(2).
29.	HHS, "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017 [2017 Payment Notice]," Final Rule, 81 Federal Register 12203, March 8, 2016, page 12206, codified at 45 C.F.R. §155.705. Also see CMS, CCIIO, "Small Business Health Options Program (SHOP)," at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/2017-Implementation-of-Vertical-Choice.html.
30.	For the iterations of guidance mentioned in this paragraph, see CMS, CCIIO, "Extension of State-Based SHOP Direct Enrollment Transition," April 18, 2016, at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/1332-and-SHOP-Guidance-508-FINAL.PDF.
31.	For more information about ACA Section 1332 waivers, see CRS Report R44760, State Innovation Waivers: Frequently Asked Questions.
32.	HHS had previously (in the 2018 Payment Notice) removed a requirement that in order to participate in a federally facilitated individual exchange, an issuer with more than 20% of the small-group market in that state also would have to participate in that SHOP exchange. HHS acknowledged that the elimination of this requirement, finalized in December 2016 and effective January 2018, likely would reduce issuer participation, and thus employer and employee participation, in affected SHOP exchanges. See HHS, "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018, Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program [2018 Payment Notice]," Final Rule, 81 Federal Register 94058, December 22, 2016, page 94144. In the 2019 Payment Notice, HHS referenced this change and noted "lower than expected enrollment, to date" in federally facilitated SHOPs and state-based exchanges using a federal platform. See page 16996 of the 2019 Payment Notice (cited at footnote 21).
33.	See 2019 Payment Notice (cited at footnote 21), pages 16996-16997. This policy change was previewed in a May 2017 agency announcement and in the November 2017 Payment Notice proposed rule, and the changes were allowed to go into effect prior to the finalization of the rule.
34.
35.	Healthcare.gov, "What's New in SHOP for 2018," at https://www.healthcare.gov/small-businesses/provide-shop-coverage/whats-new-2018-shop/.
36.	It is possible for SHOP exchanges to establish minimum participation rates and minimum contribution rates. Businesses that do not comply with established rates cannot be prohibited from obtaining coverage through SHOP exchanges; rather, health insurance plans may limit the availability of coverage for any employer that does not meet an allowed minimum participation or contribution rate to an annual enrollment period—November 15 through December 15 of each year.
37.	This estimate excludes Hawaii, as Hawaii's SHOP exchange was no longer operational in 2017 due to the state's receipt of a 1332 waiver. See CMS, CCIIO, "SHOP Marketplace Enrollment as of January 2017," May 15, 2017, at https://www.cms.gov/CCIIO/Resources/Data-Resources/Downloads/SHOP-Marketplace-Enrollment-Data.pdf.
38.
39.	See 26 U.S.C. §45R for small business eligibility and credit amount details described in this section.
40.	Internal Revenue Service, Rev. Proc. 2018-18, Section 3.09, at https://www.irs.gov/irb/2018-10_IRB#RP-2018-18, referring to 26 U.S.C. §45R(d)(3)(B).
41.	26 U.S.C. § 45R(d)(1)(B).
42.	For example, see 42 U.S.C. §18031(i), 45 C.F.R. §155.205, 45 C.F.R. §155.210, and 45 C.F.R. §155.225.
43.	Ibid. Specifically, for the requirement to implement Navigator programs, see 45 C.F.R. §155.210. For the requirement to implement certified application counselor programs, see 45 C.F.R. §155.225. The 2019 Payment Notice (cited at footnote 21, see page 16979) changed some Navigator program requirements. Exchanges previously were required to establish (i.e., grant) at least two Navigator entities, one of which had to be a community- and consumer-focused nonprofit group and the other from one of the categories listed at 45 C.F.R. §155.210. Going forward, exchanges are required to establish only one Navigator entity, and the entity does not need to be a community- and consumer-focused nonprofit group; it can be any of the entity types listed at 45 C.F.R. §155.210. In addition, the 2019 Payment Notice removed the requirement that all Navigator entities maintain a physical presence in their exchange service area. Certified application counselor programs were not addressed in the 2019 Payment Notice.
44.	45 C.F.R. §155.215.
45.	45 C.F.R. §155.220.
46.	45 C.F.R. §155.205.
47.	Ibid.
48.	42 U.S.C. §18031(d)(4).
49.	42 U.S.C. §18031(c)(1); 42 U.S.C. §18031(e). For more information, see, for example, CMS, CCIIO, "Addendum to 2018 Letter to Issuers in the Federally-Facilitated Marketplaces," February 17, 2017, at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2018-Letter-to-Issuers-in-the-Federally-facilitated-Marketplaces-and-February-17-Addendum.pdf.
50.	42 U.S.C. §18031(d)(2)(B).
51.	42 U.S.C. §18021(a)(1). For more information about the essential health benefits (EHB), see CRS Report R44163, The Patient Protection and Affordable Care Act's Essential Health Benefits (EHB).
52.	42 U.S.C. §18022. Note that the EHB cost-sharing limits and generosity requirements are referenced briefly in this report as the annual out-of-pocket limits and actuarial-value requirements that apply to all plans in the exchanges. Some consumers are eligible for further cost-sharing assistance, which builds on these provisions. See "Premium Tax Credits and Cost-Sharing Reductions" in this report.
53.	For more information about federal requirements that apply to QHPs and plans offered outside of exchanges, see CRS Report R45146, Federal Requirements on Private Health Insurance Plans.
54.	42 U.S.C. §18031(a).
55.	42 U.S.C. §18031(d)(5)(A).
56.	CMS, Fiscal Year 2018 Justification of Estimates for Appropriations Committees, May 23, 2017, at https://www.cms.gov/About-CMS/Agency-Information/PerformanceBudget/Downloads/FY2018-CJ-Final.pdf.
57.	Erin Mershon, "State Health Exchanges Wrestle with Budgets," Roll Call, July 25, 2016, at http://www.rollcall.com/news/policy/state-health-exchanges-wrestle-budgets.
58.