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Focus on Regulation

OPM Releases Proposed Approach to Multi-State Plans

On November 30, 2012, the Office of Personnel Management (OPM) released a proposed rule in which the agency set forth the process through which it will establish the Multi-State Plan Program (MSPP), and the standards and requirements for both issuers and plans in the MSPP. In an effort to enhance competition among plans offered through health benefit exchanges, PPACA created this program, and authorized OPM to contract with private health insurers to offer a minimum of 2 multi-state plans (MSPs) through the health exchanges of the 50 states and DC.

Issuers of MSPs would contract with OPM to offer multi-state plans in all Exchanges. Although issuers would need to be separately licensed in every state in which they offer a plan, they would not need to separately seek accreditation of their plans as Qualified Health Plans. The proposed rule sets forth the requirements that MSPs must meet in order for their issuers to contract with OPM. The proposed requirements are intended to neither give MSPs an advantage nor a disadvantage over other plans offered in Exchanges.

Essential Health Benefits: MSPs must have a benefits package that is substantially equal to either the EHB-benchmark plan in each state in which it operates, or any EHB-benchmark plan selected by OPM pursuant to the proposed rule. OPM may select any of the largest three Federal Employees Health Benefits Program plan options as the EHB-benchmark plan.  The proposed rule specifies how the EHB-benchmark plan must be supplemented if it does not cover pediatric oral or vision services, or habilitative services. OPM also proposes that any state-required benefits enacted by December 31, 2011 that are included in a state’s EHB-benchmark plan or specific to the market in which the MSP offers coverage would be treated as part of the OPM’s EHB-benchmark plan. Each MSP’s benefit package, including the prescription drug list, would need to be approved by OPM as substantially equal to an EHB benchmark plan.

Levels of Coverage: Issuers must offer at least one MSP at the silver level of coverage, and at least one at the gold level of coverage in each exchange in which the issuer offers an MSP. Issuers may also offer MSPs at the bronze or platinum levels, but doing so is not mandatory.  For any level of coverage for which an issuer offers an individual MSP, the issuer must also offer a child-only plan at the same level of coverage.

Phase-in period: The proposed rule would require MSPs to be offered in at least 60% of states in the first year of operation, 70% in the second, 85% in the third and all 50 states, plus DC from the fourth year forward. OPM also proposes a process through which MSP issuers would not be required to initially offer coverage statewide, but would then need to submit a plan to expand coverage throughout the state.

Additional requirements: The proposed rule outlines other elements of OPM’s proposed approach, including setting requirements regarding network adequacy and cost-sharing, having external appeals be handled by OPM, and reserving the right to assess user fees on Multi-State Plan Program issuers.