Concerns for Multi-State Health Care Exchanges?

As many states seek exemptions or special considerations during the current healthcare reform debate, questions over how to deal with multi-state exchanges become more complicated. The HR Policy Association has recommendations for state and federal legislatures. A great summary of those recommendations appears below thanks to PlanSponsor.

– Eric

March 30, 2011 ( – The HR Policy Association has drafted a letter to state governors regarding the potential impact of health insurance exchanges on the ability of employers operating in multiple states to maintain uniform health benefits programs for their employees.

Specifically, the group asked the governors as they prepare state actions on health insurance exchanges, to:

  • be mindful of the importance of the Employee Retirement Income Security Act (ERISA) preemption that allows multi-state employers to operate the same health care program in multiple states,
  • seek a timely, efficient and coordinated launch of exchanges among the states, and
  • maximize uniformity and consistency in exchange operations and the products available through the exchanges, where appropriate.

The association contends that nationwide uniformity in benefit design and administration is extremely important because it promotes efficiency and reduces health care costs to employers, employees, and dependents. In addition, it streamlines communications and promotes better understanding of coverage options by allowing employers to offer a standard set of benefits across the country, the letter said.

The association also notes that nationwide uniformity in benefit design and administration allows employers to obtain better pricing with national or regional health care providers by allowing them to negotiate contracts on a national basis. It also permits companies to provide similar benefits to their workers (regardless of where they reside), which promotes equity and the ability of employees and retirees to freely move from state to state and city to city without concern for benefit changes.

The letter notes that the Patient Protection and Affordable Care Act (PPACA) provides for states to begin operating health insurance exchanges on January 1, 2014, and by March of 2013, employers must provide their employees notice of the coverage they intend to provide in 2014, notify employees that they may be able to obtain coverage through an exchange, and inform them whether they qualify for subsidies for purchasing care through an exchange. Because of the time needed to evaluate available options and prepare communications materials, employers will need to have a good idea of what will be available through the exchanges by March of 2012, the association contends.

The letter says the employees who receive their health benefits through employer-sponsored plans are accustomed to relying on their employers and third party administrators to provide critical information about health benefit options, so the public interest would be best served if employers are given timely access to information and resources to which they can direct employees who request needed information as soon as possible.

According to the association, many functions can be standardized across the nation to facilitate administrative ease.

The association recommends that the federal government and the states take the following steps:

  • provide draft model notices that employers can use to notify employees of exchange options as soon as possible and provide opportunities for employer feedback on model language;
  • facilitate as much consistency and uniformity with other exchanges as is possible regarding the communications to employees about exchanges; and
  • consider standardizing some consumer tools used to compare plan options.


The association consists of the chief human resource officers of more than 300 large employers doing business in the United States, many of whom do business in all 50 states.

Text of the letter is here.Rebecca Moore

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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