Get the answer by reading the full document (or the Executive Summary), “Best Alternatives to a Federal Insurance Exchange in Tennessee”,
just issued by the State of Tennessee Insurance Exchange Planning Initiative
The report provides a comprehensive analysis of the
governance, structure, processes of an insurance exchange and suggests how
Tennessee may want to address the issues to ensure a stable and competitive
market in the state.
The Small Business Health Options Program (“SHOP”) is the
exchange that is applicable for employers. Major issues that impact employers
Eligible employers: Federal regulations allow employers with
less than 101 employees to participate in the SHOP. However, states are allowed
to restrict participation to employers with less than 51 employees until
January 1, 2016 when the exchange is open to employers with less than 101 employees. All employers can participate in the exchange beginning 2017. The Initiative is
recommending that Tennessee only allow employers with less than 51 employees to
participate in the SHOP. There are an estimated 225,000 employees that would be
eligible to participate in the SHOP through their employers that meet this size
Benefit design: The SHOP exchange in Tennessee would allow
unlimited benefit design variation. This contrasts with the individual exchange
in which the state may limit the number of available benefit design in order to
not overwhelm individuals with too many choices and decisions.
Insurance agents: Only agents accredited by the state will
be able to participate in the exchange and small groups purchasing through the
SHOP will be required to work through an accredited agent or broker for the
first two years of the SHOP. Agents can freely negotiate commissions with
issuers and transaction, consulting and assistance fees with small groups.
Plan choice: Employers can select a single qualified health
plan from the SHOP to offer their employees (employer choice) OR the employer
can allow their employees to select from several or all of the plans in the
SHOP (employee choice). However:
- The SHOP would not require insurers to
participate in the employee choice option
- Insurers are allowed to have different premiums
for the same benefit design/product for employer choice and employee choice
- Employers would be allowed to contribute defined
amounts to the premium vs. paying a proportion (percentage) of the premium in
the employee choice model.
Wellness: Benefit designs within the exchange can provide
incentives for enrollees to be more actively involved in their health and
wellness by allowing incentives for completion of health questionnaires and
biometric screening; maintaining normal
BMI, cholesterol, blood pressure and blood sugar levels.
Geographic Rating Areas: There are likely to be 12-15
different geographic rating areas in the state, reflecting patterns of health
care utilization and cost. Such an approach would help ensure that low-cost
geographic areas are not subsidizing the high-cost areas.
Exchange sustainability: Users of the exchange would pay for
the operating costs of the exchange through some type of administrative fee in
order to minimize any tax burden on state taxpayers. Employers would be paying
these fees either directly through assessed fees or indirectly through fees
added to premiums or administrative costs passed on through qualified health
Initiative staff is currently traveling the state to present
the major components of the white paper and getting feedback and input before
the report is finalized and submitted to Governor Haslam.
MBGH is a co-sponsor
of The Memphis “listening session” scheduled for November 17, 2011 from 6:00 pm
to 8:00 pm at the Fogelman Executive Center at the University of Memphis.
Register here for the meeting.
In addition to listening sessions, comments can be submitted
by email at email@example.com.