Exchange Billing Procedures
Because insurance offered in the Exchange will be paid for by individuals, businesses, federal tax credits, and possibly states, establishing billing procedures and responsibilities is critical to Exchange operation and to minimizing administrative costs.
*Milestone details:
*Full name: Develop enrollee billing procedures and allocate responsibilities among the Exchange, employers (for the SHOP exchange), and qualified insurance plans.
*Relevance to the ACA:
The ACA contains both requirements and options for premium payments and credits. Relevant sections include:
§1312- Allows, but does not require, individuals enrolled in a qualified health plan through the Exchange to pay their premiums to the plan.
§1401- Establishes a refundable premium tax credit for individuals with incomes at or below 400% FPL. The Secretary of HHS also is required to issue regulations for how the tax credit coordinates with the advance payment program and for any reconciliation procedures.
§1412- Establishes the advance premium tax credit and procedures. An Exchange has the authority to request advance determination of the tax credits from the Secretary of HHS. The Secretary of HHS then must notify the Exchange and the Treasury of the determinations, and the Treasury must send the advance payments to the insurer. This section also provides that states have the flexibility to provide additional premium or cost-sharing assistance to or on behalf of individuals enrolled through the Exchange.
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Maryland
Thanks Rachel, So who does premium collection in the FFE SHOP? Do employers pay the issuer/health plan directly until 2015 until FFE gets that functionality.
District of Columbia
Hi Ron- that seems like the most likely option, although the SHOP rules are not final and they are seeking comment on the delay of the premium aggregation requirement, so there may be more guidance to come.
Maryland
I have been trying to find a chart somewhere which indicates what the individual state exhanges are doing and have been out of luck. I was also trying to find out what the FFE HIX states were doing with regard to this. Who is handling the premiums for SHOP in the FFE states. Any information is appreciated. Thanks!
Ron Hess
District of Columbia
Hi Ron- Our policy decisions chart (found here: http://statereforum.org/exchange-policy-decisions-chart) has a column that tracks premium billing in state-based exchanges. The CCIIO letter to issuers on Friday indicates that in FFE and Partnership states, individuals will pay the issuer directly and that FFEs will not do premium billing. SHOP guidance released last week extends the SHOP premium aggregation deadline until 2015, so FFE SHOPs will not have that functionality until that point.
District of Columbia
The Washington exchange created a guide outlining their procedures for enrolling exchange customers in health plans, in addition to their payment process. This includes procedures for both the individual and SHOP markets.
District of Columbia
Maryland exchange staff prepared options related to billing and collection options in the individual exchange. They analyze three options: MD exchange performs all billing and collections, MD exchange performs initial billing only, or carriers perform initial and ongoing billing and collections. The analysis was presented in November and in December staff recommended that the exchange perform initial billing.
Florida
We have insight into 3 states so far, NV, UT and NY--does anyone have insight on any other states that have declared their intentions in regarding to Indiviudal billing? In light of the date change for the Blueprint, which we had hoped, would provide this information we are looking for indiviudal state updates. Can anyone answer this from their states?
New York
Just attended a NYS health exchange webinar in which the exchange indicated that the state WONT handle billing for Individual health insurance plans. Instead the carriers will bill directly. Is that the direction most states have chosen regarding individual billing ?
District of Columbia
Hi Simon- I recently wrote a blog post on this issue here: http://statereforum.org/weekly-insight/premium-billing-exchanges. So far only a couple of states are moving forward with billing, including Nevada, and a couple like MD and WA are undecided. Other states have decided not to. We are tracking state decisions on this issue on our chart here: http://statereforum.org/exchange-policy-decisions-chart as well. I had not heard about NY yet- could you share a link to the webinar or slides?
Minnesota
For states choosing to move forward with their own HIX, do you have any sense for those states who want to own the Premium Billing process versus allowing the payers to own it? What are the pros and cons?
District of Columbia
Hi William-
This is a great question. We know so far that Oregon and Colorado have decided not to own the premium billing process. California has not made a decision, but a recommendation brief to the board recommends that individuals pay their premiums directly to the issuer. Washington exchange staff recommend that the exchange aggregate premiums. Other states, like Maryland, are still in the process of deciding. I've attached documents from California and Washington that outline some of the pros and cons for the options they are considering. It seems like the main barrier for states in owning the premium billing is cost.
Minnesota
Hopefully as State exchanges grow and mature, they will begin to offer more than just medical benefit options and hopefully there will be choices across carriers for like product offerings. Imagine if you're an individual or an employer that needs to manage payments to each of these carriers. Imagine you're an individual that has multiple funding options for your exchange benefits (employer, subsidy, spouse's employer, spending accounts) that need to be consolidated for payments. Imagine you're a broker trying to track commissions across products and participants. Imagine you're a State that provides risk adjustment so that no one carrier takes undo risk in your exchange. All of these new realities require a single treasury function on the back end of the exchange. One that will send a single invoice to individuals for all benefits and consolidate their funding options, one that will send a single invoice to the employer for all employee choices and electronically debit their payment, one that will send brokers a single commission payment for all business in the exchange and one that will calculate and process risk adjustments across carriers. This is the solution that my company, Certifi provides for the Utah State Exchange today as well as other private exchanges. We create and process over 8MM financial transactions for exchanges today, with this SaaS that was designed and built specifically for this purpose. We installed UT in three months for less than 10% of what other states are spending on design. We have been in the benefits tech space building billing systems for 15 years. This is a highly specialized piece of the exchange and one that I encourage everyone to shop very specifically for. Please visit certifi.net for more information.
District of Columbia
If you're interested in this topic, check out my latest blog post where I take a look at a few states and what decision they've made related to premium billing: http://www.statereforum.org/weekly-insight/premium-billing-exchanges
Minnesota
For the states completing RFPs for their HIX, have you seen any that are allowing vendors to respond to just the Premium Billing / Administration portion?
Nebraska
Hi William,
Rhode Island included 9 "Task Orders" in their RFP. Task Order 9 was the Financial Management Task Order which included a BPO premium billing requirement and was the only of the 9 which could be responded to individually. Similarly Task Order 9 was optional for those vendors responding to Task Orders 1-8. The State advised that they may select one vendor for all 9 Task Orders or one vendor for Task Orders 1-8 and another for Task Order 9, though the vendor for Task Orders 1-8 will be the prime and a different vendor for Task Order 9 would be required to subcontract under the prime.
District of Columbia
At their April 23, 2012 meeting, the Colorado Exchange board voted to allow employers in the SHOP exchange the option of paying premiums directly and voted against premium aggregation in the Individual Exchange. See advisory board recommendations and meeting minutes in attached document.
Florida
Has there been any further discussion regarding if a state is looking to own the billing experience? It is not clear yet in the states if they want to "own" that portion or if they want to put that back to the carrier to handle. I realize AHIP has made recomendations regarding this, and we monitor the existing RFP's to see if the states intentions are within that document, but havent had the best of luck. Any input would be appreciated
Nebraska
Hi Jennifer,
This is an outstanding question -- one most states don't seem to be asking until they actually start looking at implementation. The most recent state RFPs seem to actually be more vague about this in the Individual Exchange since the recent HHS guidance. I'll be speaking at the AHIP Exchange Conference in Salt Lake City on June 20 (http://www.ahip.org/Conferences/JuneExchange2012/ -- right before Institute) on Subscriber Premium Billing in an Evolving Reform World, and this will be one of the topics. In my personal opinion, with all due respect to HHS, this is one place where recent guidance has done us all a disservice. The Exchange will have the responsibility for tracking all premiums and continued eligibility (which is driven by timely payment) with associated reporting, and yet in the individual exchanges payments must be allowed to go directly to the QHPs. Most carriers are not currently equipped to handle large scale individual premium billing and payment processing (in our current world over 85% of individual subscribers still pay by paper payment by mail, and remember that the timeliness of each payment will have to be adjudicated against the billing system to determine timeliness). Splitting the money flow though will cause operational challenges. If a state allows some individuals to pay the QHPs directly and others to pay through a single-point/consolidated bill to the Exchange, this will increase the complexity of the data flow requirements between the Exchange and each QHP. It will also make other ongoing financial management operations more challenging (refunds to individuals who terminate with a partial overpayment, retroactive premium billing adjustments when individuals report retoractive life changing events, payments to brokers/navigators, funding of the Exchange, etc.). All of these items need to be seamlessly coordinated with precise operational planning, and if the money is split randomly between the QHPs and the Exchange the complexity will increase. Therefore, while the consensus opinion in the commerical sector where this type of billing has been performed for a long time is that the ideal would have been to require centralized single-point billing from the Exchange, if guidance requires that some payments be allowed to go directly to the QHPs then it will probably be simpler to require that all payments go to the QHPs with reporting back to the Exchange. The Exchange can then plan each of the downstream financial management operations accordingly.
Florida
Mark, thank you very much for your insight, I will also be at AHIP, looking forward to meeting you and listening to you present---
District of Columbia
As my colleague, Rachel Dolan, noted in another discussion, the Colorado Health Benefit Exchange Board has discussed this issue. At their April 23rd meeting, the board voted not initially accept payments or conduct billing in the individual exchange. You can read more about their discussion of the issues and decision-making in the board meeting minutes for April 23rd, as well as the minutes for their April 14th meeting: http://www.getcoveredco.org/Resources/Board-Meeting-Activities/Board-Mee....
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