State and federal exchanges are set to begin enrollment on October 1, 2013.  The Department of Health and Human Services (HHS) published a final rule detailing some exchange operations on August 30, 2013.  The final rule retains most of the proposed rule which addressed the individual and small business health insurance (SHOP) exchanges.

HHS confirmed that it will monitor federal and state exchanges to ensure they are compliant with privacy and security requirements; however, state exchanges will monitor all non-exchange entities operating in their exchange.  The final rule establishes HHS’ oversight of the health insurance issuers in federal exchanges, but provides transitional relief in 2014 allowing an issuer to avoid penalties if they made a good faith attempt to comply with exchange standards.

Consumers and employers in the individual market will have access to an appeals process.  If an appellant disagrees with a treatment or coverage decision made by the exchange, the appellant will undergo a preliminary case review called an “informal resolution.”  If still unsatisfied, the appellant has the right to a hearing.  State exchanges may operate their own appeals process provided it meets certain requirements.  However, appellants in state exchanges can utilize the federal appeals process if dissatisfied with the state’s appellate decision.

An employer is entitled to a separate appeals process to contest a determination that it does not provide Minimum Essential Coverage that is Minimum Value and Affordable.  Similar to appeals on the individual market, a state exchange has flexibility to establish an appeals process.  HHS will oversee the appeals process if the state choose not to create its own.

Further, employer and employee applicants to the SHOP exchange can appeal denials.  A state that operates a SHOP exchange will operate the appeals process, and a state without a SHOP exchange will have an appeals process operated by the federal government.

More guidance is expected before October 1, 2013, but these rules finally give more detail as to how the exchanges will operate.