Top Three Things Small Businesses Should Know About the Affordable Care Act

Meredith Olafson

January 28, 2013

12:53 PM EST

 

Note: This post was originally published on SBA.gov blog. To see the original post, please click here.

The Affordable Care Act will help small businesses by lowering premium cost growth and increasing access to quality, affordable health insurance. Depending on whether you’re a small employer or a larger employer, different provisions of the Affordable Care Act may apply to you as described below.                                           

1.  Businesses with Fewer than 25 Employees- Small Business Tax Credits

The Affordable Care Act does not require that businesses provide health insurance, but it offers tax credits for eligible small businesses that choose to provide insurance to their employees. To qualify for a small business tax credit of up to 35 percent (up to 25 percent for non-profits), you must have:

Fewer than 25 full-time equivalent employees

Pay average annual wages below $50,000

Contribute 50 percent or more toward employee health insurance premiums

Beginning in 2014, this tax credit goes up to 50 percent (35 percent for non-profits) and is available to qualified small businesses who participate in the Small Business Health Options Program (SHOP) Exchanges.

2.   Businesses with 50 or Fewer Employees- Affordable Insurance Marketplaces

The Affordable Care Act does not require that businesses provide health insurance, but beginning in 2014, small businesses with generally 50 or fewer employees will be able to purchase coverage through SHOP, competitive marketplaces where small employers can go to find health coverage from a selection of providers. The SHOP Marketplaces and Individual Marketplaces for those who are self-employed open on January 1, 2014. Open enrollment begins on October 1, 2013. SHOP will offer small businesses increased purchasing power similar to that of large businesses.

3.  Businesses with 50 or More Employees- Employer Shared Responsibility Provisions

Under the Affordable Care Act, the Federal government, State governments, insurers, employers, and individuals share the responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. Employers are not required to provide coverage to their employees under the Affordable Care Act.   However, beginning in 2014, businesses with 50 or more full-time employees (or full-time equivalents) that do not offer affordable health insurance that provides a minimum level of coverage to substantially all of their full-time employees (and their dependents) may be subject to an employer shared responsibility payment if at least one of their full-time employees receives a premium tax credit to purchase coverage in an insurance Marketplace.  A full-time employee is generally one who is employed an average of 30 or more hours per week.

If you meet or are close to this threshold level of full-time employees, it’s important to understand how these rules may apply to you and how the employer shared responsibility payments could be triggered.   For more guidance on the employer shared responsibility payments, refer to this FAQ from the IRS.

Meredith Olafson is Senior Policy Advisor for the U.S. Small Business Administration where she oversees the agency’s education and outreach efforts around health care and the Affordable Care Act.

For more information please go to http://www.sba.gov/healthcare

Article Link: http://www.whitehouse.gov/blog/2013/01/28/top-three-things-small-businesses-should-know-about-affordable-care-act a

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Changes ahead due to Patient Protection and Affordable Care Act

KyPost.com

Posted: 01/29/2013 Last Updated: 23 hours and 9 minutes ago

By: Kristi L. Nelson, Scripps Howard News Service

The far-reaching Patient Protection and Affordable Care Act will mean myriad changes to the way health care is accessed and delivered in this country — and how it affects you could depend on your age, income, health and current insurance status, among other things.

Here’s a look at what changes could be most important to you:

If you don’t already have health insurance: You’re going to have to get coverage next year or likely face a financial penalty that starts at 1 percent of your income (or $95, whichever is more) in 2014, and rises to 2.5 percent of your income by 2016. You could be exempt if you’re American Indian, if health insurance goes against your religious beliefs or if you can show financial hardship. The good news is, thanks to other provisions of the Affordable Care Act, it should be easier and more affordable for people who are uninsured now to get insurance.  

If you are a senior citizen: You should already be seeing some benefits of the reform, including not having to pay for preventive services through Medicare and getting help paying for prescription drugs once you hit the “doughnut hole” in Medicare Part D coverage. By 2020, seniors should be paying only 25 percent of those drugs’ costs. On the other hand, some Medicare benefits are being cut — things like hearing aids, glasses and memberships to fitness centers. And you may find that some illnesses and surgeries that Medicare once would have considered appropriate for an overnight hospital stay are now considered outpatient, which means you may be billed for individual costs that once were part of the hospital “package.” If you do spend time in the hospital, you may notice your providers doing more aggressive follow-up once you are released, to try to prevent you from having to go back into the hospital.  

If you are a young adult: If you’re younger than 27 and not offered insurance through your job, you can remain on your parents’ health insurance policy until your 27th birthday. If that’s not an option for you and you’re young, in good health and don’t expect to need much medical care, you can purchase a “catastrophic” health insurance plan with low premiums but a high deductible — coverage doesn’t kick in until you’ve paid for $6,000 in care yourself.  

If you’re wealthy: You may pay a higher Medicare tax this year. Those with an annual income of more than $200,000 for one person or $250,000 for couples will pay a 2.35 percent Medicare tax, up from 1.45 percent. In five years, the government will start taxing high-dollar, high-coverage employer-sponsored “Cadillac” health plans with a 40 percent excise tax.  

If you’re low income: It’s possible that you’ll qualify for Medicaid in the future even if your income is too high to qualify now. The ACA, in its original form, intended to make it so that all Americans who earned less than 133 percent of the federal poverty line (about $14,000 for a single person, or $29,000 for a family of four) would be eligible to enroll in Medicaid, giving the states 100 percent of the extra money needed for the first three years and gradually requiring the states to fund 10 percent of the expansion in the future. But the U.S. Supreme Court ruled that the federal government could not force states to expand their Medicaid programs just to continue getting funds they were already receiving.  

If you’re middle class: If you’re self-employed or work for a smaller company, you should be able to buy insurance on the health exchange. People who make four times the federal poverty level (about $44,000 for an individual or $88,000 for a family of four) or less may be eligible for subsidies from the federal government, which would be paid to the insurance companies and appear on your bill as a discount. The idea is that people would not pay more than 10 percent of their income toward health insurance (and the lower the income, the less the percentage).  

If you’re an undocumented immigrant: There are no provisions in the ACA for you at all. You wouldn’t be eligible for Medicaid or to buy insurance on the exchange. You can still purchase a policy through a broker, if you can afford one, or pay yourself for care at clinics, hospital emergency rooms and other providers.  

If you typically claim unreimbursed medical expenses on your tax return: You may not get to do so now — they must be 10 percent of your income, up from 7.5 percent in the past.  

If you have a health insurance plan through your large employer: You’re not likely to see many changes right now. Your premiums will likely stay flat or, if the insurance company your plan is through has been making large profits, may drop as the government now regulates what percentage of profit must be funneled back into providing quality or lowering premiums.

Right now, only small businesses and individuals who don’t have insurance through their jobs can buy insurance on the exchange

— but that does mean if you lose your job, you should have an easier time finding affordable health insurance coverage for you and your family.

Article Link: http://www.kypost.com/dpps/shared/changes-ahead-due-to-patient-protection-and-affordable-care-act_8203877

Health insurance exchange reporting requirement for employers delayed

 

By Jerry Geisel, Crain’s Business Insurance

Posted: January 25, 2013 – 2:00 pm ET

Tags: Insurance Exchanges, Insurance, Labor, Public Health

Federal regulators have delayed indefinitely a health care reform law requirement that employers notify employees in writing by March 1 about the availability of public health insurance exchanges.

In a set of frequently asked questions and answers jointly issued Thursday by the Departments of Health and Human Services, Labor and Treasury, regulators said the reporting requirement will not go into effect until regulations are issued and “become applicable.”

Regulators cited several reasons for delaying the March 1 reporting requirement, including the intent to set a date that would give employers more time and to coordinate more closely with exchanges’ open enrollment.

“We are committed to a smooth implementation process including providing employers with sufficient time to comply and selecting an applicability date that ensures that employees receive the information at a meaningful time,” regulators said in the FAQs.

Regulators now expect that the notices will be distributed in late summer or fall, which would coordinate with the Oct. 1 starting date for the exchanges’ open enrollment.

Regulators also said they are considering providing “model, generic language” that employers could use.

Benefit experts welcomed the delay, which had been expected.

Employers “were concerned about this very imminent deadline. Coordinating the notice with fall open enrollment should also help employers effectively meet this notice requirement,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.

 

Read more: Health insurance exchange reporting requirement for employers delayed | Modern Healthcare http://www.modernhealthcare.com/article/20130125/INFO/301259994#ixzz2JHMhgAw5?trk=tynt

CMS releases proposed rules for health information exchanges

 
Healthcare IT NewsJanuary 17, 2013
The Centers for Medicare and Medicaid Services (CMS) has released a proposed rule that outlines further details about the standards and systems for states’ health insurance exchanges, Medicaid and the Children’s Health Insurance Programs (CHIP) to work together to meet consumer health needs, improve quality and lower costs in 2014.
 
The proposed rule released Jan. 14 also provides options for coordinating Medicaid, CHIP, and exchange communications to consumers about eligibility notices and appeals, and additional benefits and cost-sharing flexibility for state Medicaid programs under the Patient Protection and Affordable Care Act.
The intent is “to afford states substantial discretion in the design and operation of an exchange, with greater standardization provided where directed by the statute or where there are compelling practical, efficiency or consumer protection reasons,” according to the 474-page document.
 
The theme builds on the health insurance exchange rule in March 2012 “to continue to rely on the use of information technology and data matching to minimize administrative burden on applicants, states, and plans,” CMS said.
 
State-based exchanges may also turn to the Health and Human Services Department for verification of whether an individual has employer-sponsored coverage and conducting some types of appeals, according to Health and Human Services Secretary Kathleen Sebelius. 
 
The proposed rule “gives states more flexibility to implement the law in a way that works for them,” she said in an announcement accompanying release of the proposed rule. 
 
Under the healthcare law, adults who earn up to 133 percent of poverty, or $14,865 for an individual or $30,656 for a family of four, may be eligible for Medicaid coverage. Others may shop and compare plans for coverage through a health insurance exchange, where they may also determine if they are eligible for tax credits or other affordability programs.
 
The provisions include:
 
·         Process for a coordinated exchange and Medicaid appeals of eligibility determinations. Enrollees will first be able to have a preliminary case review by appeals staff in an informal resolution. If the enrollee is satisfied, the decision stands. Enrollees dissatisfied with the outcome would have rights to a full appeal. A federally-managed appeals process would be available to enrollees in the individual market. State-based exchanges could establish their own appeals processes following the rule’s standards, with individuals retaining the right to a federal appeal after exhausting the state-based appeals process. States also may coordinate appeals of eligibility decisions across Medicaid, CHIP and the exchange.
·         Notices and communications about eligibility for insurance affordability programs will be clear and accurate. The notices of insurance affordability programs will be combined, including Medicaid, CHIP, advance payments of the premium tax credit and cost-sharing reductions, as well as eligibility to enroll in a qualified health plan through the exchange.
·         Medicaid cost sharing of premiums will be updated and simplified. Additionally, states will be allowed to establish higher cost sharing for non-preferred drugs and to impose higher cost sharing for non-emergency use of the emergency department.
·         Eligibility categories will be streamlined. The eligibility categories that will be in effect in 2014 build on the Medicaid and CHIP eligibility final rule issued in March 2012. It shifts to use of the Modified Adjusted Gross Income, or MAGI, method for determining eligibility with most populations. It also simplifies and aligns the citizenship documentation process across Medicaid, CHIP and the exchange.
The proposed rule also outlines standards for the approval of application counselors, who will play an important role in assisting individuals in applying for and maintaining coverage in a qualified health plan through the exchange and insurance affordability programs.
 

In Good Hands: Adult Day Care in the US Industry Market Research Report Now Available

from IBISWorld
PRWeb – Thu, Jan 17, 2013
           
An aging population and an anticipated expansion in private healthcare coverage in line with the Patient Protection and Affordable Care Act are forecast to increase already growing demand for adult day-care services. For these reasons, industry research firm IBISWorld has added a report on the Adult Day Care industry to its growing industry report collection. Los Angeles, CA (PRWEB) January 17, 2013
 
The Adult Day Care industry has performed well over the past five years. The steadily aging population and expensive alternative long-term care options fueled demand for industry services. “Growth slowed over 2010 and 2011, though, as state and local governments faced budget shortfall stemming from the recession,” says IBISWorld industry analyst David Yang. “Households also had difficulty paying for services due to stagnant disposable income growth.” Still, other care options, like nursing homes, can cost five times more than adult day care. As a result, this industry quickly returned to strong growth in 2012 as the economy recovered and disposable income grew. In the five years to 2013, revenue is estimated to increase at an annualized rate of 2.0% to $6.2 billion.
 
Despite growth, profit has slightly declined since 2008 due to a slowdown in Medicaid funding for adult day care. Due to the recession, many states, such as California, attempted to cut or reduce adult day-care programs over 2010 and 2011. According to research from MetLife, government funding is estimated to contribute 55.0% of funding for industry programs. Consequently, profit declined. Despite the decline, many firms have entered this industry to meet the steadily growing demand for adult day care. In the five years to 2013, the number of enterprises increased an estimated 2.9% per year on average. “The majority of industry operators are relatively small companies,” according to Yang, “so theAdult Day Care industry is highly fragmented.” The two largest companies in the industry are Senior Care Centers of America and Easter Seals, a prominent nonprofit. Over the past five years, market share concentration has increased slightly due to Senior Care’s merger with Active Day, previously the largest company in the industry.
 
Over the next five years, the percentage of people aged 65 and older in the United States is projected to increase. As the population ages, the prevalence of Alzheimer’s and other physical and mental diseases will increase, bolstering demand for adult day-care services. The Patient Protection and Affordable Care Act is anticipated to increase private health insurance coverage, resulting in greater funding for this industry. Disposable income will also recover as the economy returns to growth, allowing households to better afford adult day-care services. As a result, IBISWorld forecasts that industry revenue will continue to grow in the five years to 2018. For more information, visit IBISWorld’s Adult Day Care in the US industry report page.
 
IBISWorld industry Report Key Topics
 
This industry provides social and basic health assistance, including transportation, meals, personal hygiene and therapeutic activities, to the elderly and individuals with mental or physical disabilities.
 
Services are typically provided during normal business hours through adult care centers. This industry does not include home care.
 
About IBISWorld Inc.
 
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry.
 
With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide.
 
For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
 
Gavin Smith IBISWorld 310-866-5042 Email Information
 

11 states get extra $1.5 billion for online health insurance exchanges

11 states get extra $1.5 billion for online health insurance exchanges

 

By IFAwebnews Staff

Posted: January 18, 2013

The Department of Health and Human Services (HHS) has awarded an additional $1.5 billion in grants to 11 states to develop their online health insurance exchanges.

HHS Secretary Kathleen Sebelius, in announcing the grants, said the money is intended to ensure the states have the resources necessary to build online marketplaces that meets the needs of their residents.

California, Delaware, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, and Vermont have all received portions of the Exchange Establishment Grants.

“These states are working to implement the health care law and we continue to support them as they build new affordable insurance marketplaces,” Sebelius said. “Starting in 2014, Americans in all states will have access to quality, affordable health insurance and these grants are helping to make that a reality.”

Beginning Jan. 1, 2014, Americans must be covered by health insurance as required by the Patient Protection and Affordable Care Act (PPACA). All exchanges must be operational by Oct. 1, 2013, to allow consumers to begin purchasing insurance online.

Delaware, Iowa, Michigan, Minnesota, North Carolina, and Vermont received awards today for Level One Exchange Establishment Grants, which are one-year grants states will use to build marketplaces.

California, Kentucky, Massachusetts, New York, and Oregon received Level Two Exchange Establishment Grants today. Level Two grants are multi-year awards to states to further develop their marketplaces.

PPACA requires all states to have an online insurance exchange.

A total of 19 states are operating their own exchanges, 25 defaulted and have passed the responsibility for creating and running their exchanges back to the federal government, and seven will operate as state-federal exchange partners.

Article Link: http://ifawebnews.com/2013/01/18/11-states-get-extra-1-5-billion-for-online-health-insurance-exchanges/

Raising the Medicare age could hurt young workers

 

By Tami Luhby CNN Money January 23, 2013: 10:15 AM ET

NEW YORK (CNNMoney)

Raising the Medicare eligibility age won’t just affect older workers … it could ripple all the way down the career ladder.

If senior citizens can’t sign up for Medicare until age 67, many will likely stay on the job longer so they can keep their health insurance. That means it could be tougher for mid-career workers to move up, which in turn could make it harder for younger workers to secure entry-level positions, economists say.

“The only way to free up jobs at the bottom for young people is for older workers to retire,” said Sung Won Sohn, an economics professor at California State University Channel Islands. “No one wants to retire without health care.”

Options for cutting Medicare costs are back on the table as the Obama administration and lawmakers seek ways to reduce the deficit. President Obama has said he’d be willing to make modest changes to Medicare as part of the debt ceiling negotiations, while House Republicans are looking to overhaul the troubled entitlement programs.

Raising the eligibility age to 67 has been kicked around for years. Advocates say that the program should reflect the increased lifespan that Americans now enjoy, as well as the fact that there are fewer workers to support retirees.

Related: Obama’s economy: A snapshot

There’s already evidence that raising the entitlement age affects workers’ decisions to retire. A recent report from the Congressional Budget Office estimated that about half of the increase in the share of people age 62 or older who participated in the labor force during the 2000s can be attributed to the increase in the full retirement age of Social Security, which rose by one year to 66.

CBO expects a similar jump when the full retirement age for Social Security goes up to 67 in coming years. The share of men and women age 65 to 69 in the labor force should rise by 4 percentage points between 2012 and 2022, the report said.

Keeping senior citizens in the workforce could prove problematic for those down the career chain, particularly during weak labor conditions such as we’ve had in recent years.

 During the Great Recession, older workers hung onto their jobs, exacerbating the tough market for younger ones, said Sarah Watt, economic analyst with Wells Fargo Securities.

The share of Americans age 65 and over in the labor market rose to 18.5% in 2012, up from 16.0% in 2007. At the same time, the share of those age 25 to 54 fell to 81.4%, from 83.0%.

A similar scenario played out in the higher education arena after 1994 when universities were barred from instituting a mandatory retirement age of 70, said Carl Van Horn, director of Heldrich Center for Workforce Development at Rutgers University. More older professors are staying on the job, making it harder for younger PhDs to get tenure track positions or mid-career faculty to advance.

“There just weren’t as many openings,” he said.

Have you had trouble finding work or moving up as a result of older workers staying on the job longer? Email tami.luhby@turner.com and you could be featured in an upcoming story.

First Published: January 23, 2013: 10:15 AM ET

Report: CMS Community Initiatives Could Reduce Health Costs

By Ankita Rao

JANUARY 22ND, 2013, 4:03 PM

 Kaiser Health News

A pilot program introduced by the U.S. Centers for Medicare and Medicaid Services to boost quality of care for seniors by developing community approaches to health problems could play a key role in bringing down costs, according to a new report in the Journal of the American Medical Association.

Quality Improvement Organizations, or QIOs, are private groups in each state and U.S. territory that contract with the government for three years to improve health services for Medicare patients. They are comprised of health care providers and other medical professionals, social services workers and other community members.

In Tuesday’s report, researchers found a 5.7 percent average reduction in 30-day hospital readmissions across 14 economically and demographically diverse communities over a two-year period. The number of patients admitted to the hospital within 30 days of a prior admission is one possible measure of efficiency, since the cost and burden of readmission can be preventable.

One in five Medicare patients returns to the hospital within 30 days of being discharged. The problem is an expensive one: in 2004, these readmissions cost Medicare $17.4 billion dollars.

The interventions used by the 14 community groups varied, but they included efforts to improve medication management and transitional care for patients leaving the hospital. Author Dr. Jane Brock, a coordinator at the Colorado Foundation for Medical Care’s Medicare quality improvement program, said that providing social services that can monitor and track patient treatment was one key to the project’s success.

Author Dr. Joanne Lynn, a director at the Altarum Institute, said the average community with 50,000 Medicare beneficiaries could have saved $4 million on readmissions alone if they used the various interventions that the QIOs practiced within their communities.

“Even those with low rates of readmissions had plenty [of hospitalizations] to be avoided,”Lynn said.

The report also included the results from patient satisfaction surveys, emergency room visits and mortality rates to screen for negative changes from the interventions. They found that other health factors remained stable or improved with the reduction of readmissions.

Brock said the successful outcomes would help expand the idea of community-based interventions.

“My hope is there is great recognition that this is the best purpose of the QIOs: We’re not competitors, we’re not regulatory, they really bring people together,” she said.

THIS ENTRY WAS POSTED ON TUESDAY, JANUARY 22ND, 2013 AT 4:03 PM.

 

Article Link: http://capsules.kaiserhealthnews.org/index.php/2013/01/report-cms-community-wide-initiative-could-bring-down-health-costs/

CMS releases proposed rules for health information exchanges

CMS releases proposed rules for health information exchanges

Healthcare IT NewsJanuary 17, 2013

The Centers for Medicare and Medicaid Services (CMS) has released a proposed rule that outlines further details about the standards and systems for states’ health insurance exchanges, Medicaid and the Children’s Health Insurance Programs (CHIP) to work together to meet consumer health needs, improve quality and lower costs in 2014.

The proposed rule released Jan. 14 also provides options for coordinating Medicaid, CHIP, and exchange communications to consumers about eligibility notices and appeals, and additional benefits and cost-sharing flexibility for state Medicaid programs under the Patient Protection and Affordable Care Act.

The intent is “to afford states substantial discretion in the design and operation of an exchange, with greater standardization provided where directed by the statute or where there are compelling practical, efficiency or consumer protection reasons,” according to the 474-page document.

The theme builds on the health insurance exchange rule in March 2012 “to continue to rely on the use of information technology and data matching to minimize administrative burden on applicants, states, and plans,” CMS said.

State-based exchanges may also turn to the Health and Human Services Department for verification of whether an individual has employer-sponsored coverage and conducting some types of appeals, according to Health and Human Services Secretary Kathleen Sebelius. 

The proposed rule “gives states more flexibility to implement the law in a way that works for them,” she said in an announcement accompanying release of the proposed rule. 

Under the healthcare law, adults who earn up to 133 percent of poverty, or $14,865 for an individual or $30,656 for a family of four, may be eligible for Medicaid coverage. Others may shop and compare plans for coverage through a health insurance exchange, where they may also determine if they are eligible for tax credits or other affordability programs.

The provisions include: 

  • Process for a coordinated exchange and Medicaid appeals of eligibility determinations. Enrollees will first be able to have a preliminary case review by appeals staff in an informal resolution. If the enrollee is satisfied, the decision stands. Enrollees dissatisfied with the outcome would have rights to a full appeal. A federally-managed appeals process would be available to enrollees in the individual market. State-based exchanges could establish their own appeals processes following the rule’s standards, with individuals retaining the right to a federal appeal after exhausting the state-based appeals process. States also may coordinate appeals of eligibility decisions across Medicaid, CHIP and the exchange.
  • Notices and communications about eligibility for insurance affordability programs will be clear and accurate. The notices of insurance affordability programs will be combined, including Medicaid, CHIP, advance payments of the premium tax credit and cost-sharing reductions, as well as eligibility to enroll in a qualified health plan through the exchange.
  • Medicaid cost sharing of premiums will be updated and simplified. Additionally, states will be allowed to establish higher cost sharing for non-preferred drugs and to impose higher cost sharing for non-emergency use of the emergency department.
  • Eligibility categories will be streamlined. The eligibility categories that will be in effect in 2014 build on the Medicaid and CHIP eligibility final rule issued in March 2012. It shifts to use of the Modified Adjusted Gross Income, or MAGI, method for determining eligibility with most populations. It also simplifies and aligns the citizenship documentation process across Medicaid, CHIP and the exchange.

The proposed rule also outlines standards for the approval of application counselors, who will play an important role in assisting individuals in applying for and maintaining coverage in a qualified health plan through the exchange and insurance affordability programs.

 

Article Link: http://www.healthcareitnews.com/news/cms-releases-proposed-rules-health-information-exchanges

States Will Be Given Extra Time to Set Up Health Insurance Exchanges

By ROBERT PEAR

Published: January 14, 2013

New York Times

WASHINGTON — The White House says it will give states more time to comply with the new health care law after finding that many states lag in setting up markets where millions of Americans are expected to buy subsidized private health insurance.

Under the law, the secretary of health and human services was supposed to determine “on or before Jan. 1, 2013,” whether states were prepared to operate the online markets, known as insurance exchanges.

But the secretary, Kathleen Sebelius, working with the White House, said she would waive or extend the deadline for any states that expressed interest in creating their own exchanges or regulating insurance sold through a federal exchange.

A political benefit of this strategy is that it allows the administration to keep working with even the most recalcitrant states. Administration officials said they were trying to persuade such states to share the work of running an exchange, supervising health plans and assisting consumers.

The exchanges are a crucial element of President Obama’s health care law. Every state is supposed to have one by October, and most Americans will be required to have coverage, starting in January 2014. The federal government will run the exchange in any state that is unwilling or unable to do so. It now appears that federal officials will have the primary responsibility for running exchanges in at least half the states — far more than expected when the law was passed in 2010.

Ms. Sebelius has given “conditional approval” to 17 states that want to run their own insurance exchanges. The 17 include Utah, where officials have said they are reluctant to perform some functions of an exchange.

In its application, Utah said it did not want to enforce the federal requirement for people to carry insurance and was reluctant to determine whether consumers might be eligible for federal income tax credits to help defray the cost of insurance.

“Those are clearly federal responsibilities,” said Norman K. Thurston, the health reform coordinator for Gov. Gary R. Herbert of Utah, a Republican. “We are not enthusiastic about enforcing federal tax policy.”

Federal officials granted conditional approval to some states even though state legislators had not provided clear legal authority or money to run an exchange.

Gov. C. L. Otter of Idaho, a Republican, received conditional approval from the Obama administration this month. But getting approval from the Idaho Legislature, where Republicans control both houses with large majorities, will be more of a challenge, state officials said.

Rather than judging their readiness at this time, Obama administration officials said they would work with the 17 states, setting timelines and milestones for progress toward creation of an exchange.

“There is no deadline,” said Gary M. Cohen, director of the federal Center for Consumer Information and Insurance Oversight. “We are going to give final approval once states demonstrate that they are able to satisfy all the requirements and meet all the conditions of operating an exchange.”

Federal officials are also allowing extra time to other states that might cooperate with the White House to some degree. Ms. Sebelius told states they had until Feb. 15 to file applications to operate exchanges “in partnership with the federal government.”

At a meeting here last week, Ms. Sebelius encouraged Gov. Rick Scott of Florida, an outspoken Republican critic of the federal law, to work in partnership with the federal government in running an exchange for his state, where 3.8 million people are uninsured.

Cindy Gillespie, leader of the health policy team at the law firm McKenna Long & Aldridge, said the Obama administration was trying to accommodate states within the limits of the law.

“It’s smart,” said Ms. Gillespie, who worked for Mitt Romney when he was governor of Massachusetts. “This is a respectful strategy. It shows deference to the states.”

Jay Angoff, a former administration official who served as a senior adviser to Ms. Sebelius, said: “There is no such thing as ‘conditional approval’ in the statute, nor is there a ‘partnership exchange’ in the statute. The federal government has the ultimate responsibility for making sure that an exchange is established in every state. So if a state that receives conditional approval is unable to do all the things it needs to do to establish an exchange by Oct. 1 — which is likely — then the federal government will run the exchange in that state.”

In all the states that received conditional approval, Mr. Cohen said, “there is more work to be done to be ready for open enrollment in October.”

Utah has had an exchange for small businesses for several years. To comply with federal law, Mr. Cohen said, the Utah exchange needs to offer coverage to individuals and help them enroll in health plans with advice from counselors, known as navigators.

It is unclear whether the State Legislature will approve the next steps. “I am opposed to using one dime of Utah state taxpayers’ dollars to comply with federal requirements for the exchange,” said Rebecca D. Lockhart, a Republican who is speaker of the Utah House of Representatives.

Federal officials said they were laying the groundwork for exchanges in Oklahoma and other states that refused to set up their own. But Oklahoma officials said they had not observed much activity. “We have not seen evidence of any steps to set up a federal exchange in Oklahoma,” said Kelly Collins, a spokeswoman for the State Insurance Department.

Julie J. Cox-Kain, the chief operating officer of the Oklahoma Health Department, said: “I assume the federal government is working quickly to build an exchange here and in other states. But the only evidence we’ve seen is a couple of telephone calls seeking information about state insurance regulations.”

A version of this article appeared in print on January 15, 2013, on page A15 of the New York edition with the headline: States Will Be Given Extra Time to Set Up Health Insurance Exchanges.

 

Article Link: http://www.nytimes.com/2013/01/15/us/states-will-be-given-extra-time-to-set-up-health-insurance-exchanges.html?_r=0