On October 26, Governor Otter’s Health Insurance Exchange Workgroup voted to recommend that Idaho establish a nonprofit corporation to serve as the state’s health insurance exchange. This is an important step towards establishing a state-based health insurance exchange that will retain local control over the market for individual and small-group health insurance policies, but more action is required—and soon. Idaho has until November 16, 2012 to submit a blueprint for a state-based exchange to the US Department of Health and Human Services. If Idaho does not meet this deadline, the federal government will establish and operate Idaho’s health insurance exchange.
Starting in 2014, federal law will enable individuals to obtain health insurance coverage either from their employer, from a federal or state program such as Medicare and Medicaid, or from private insurers that offer individual health insurance policies. The federal law encourages individuals to obtain, and employers to offer, insurance through a system of carrots—in the form of tax credits—and sticks—in the form of tax penalties.
The health insurance exchanges are established to help individuals and small employers navigate this system of incentives and penalties. A health insurance exchange is an Internet-based marketplace for qualified health insurance plans that will offer standardized plans and information so customers can make “apples to apples” comparisons between competing health plans. The exchanges will also help individuals determine their eligibility for a tax credit to cover the cost of premiums.
The business representatives on Governor Otter’s Health Insurance Exchange Workgroup supported a state-based exchange because it offers Idaho a great deal of flexibility to design and operate the exchange in a manner best-suited to the needs of Idaho’s individuals and small employers. See John Miller, Panel to Otter: Adopt Nonprofit State Exchange, S.F. Chronicle, Oct. 26, 2012, available here and Betsey Russell, Idaho Panel Votes for State-Run Health Exchange, Spokesman Review, Oct. 26, 2012, available here. For more on why Idaho businesses should care about whether Idaho establishes a state-based health insurance exchange, please see our recent blog post on this topic.
The Patient Protection and Affordable Care Act (PPACA) of 2010 implements sweeping changes to America’s health care and health insurance systems that affect Idaho employers of all sizes. Hawley Troxell has a team of attorneys with specialties in business law, employee benefits, and health care that are available to consult with business owners who seek to understand how PPACA and health insurance exchanges will affect their employees and their bottom line.
If you would like more information about this topic or other legal issues, please contact a member of our Health Law Group or call 208.344.6000.