Contract Award Puts Wheels in Motion for Establishing Federal Insurance Exchange Program

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In an effort to provide consumers with competitive insurance options as mandated by the Patient Protection and Affordable Care Act (PPACA), the federal government has awarded a $93.7 million, multi-year contract to CGI Federal, Inc. to establish a federal health insurance exchange. The Centers for Medicaid & Medicaid Services (CMS) Center for Consumer  Information & Insurance Oversight (CCIIO) has hired CGI Federal, Inc., a U.S.  subsidiary of CGI Group, Inc., to build the federally-sponsored health insurance marketplace that will “provide millions of Americans with ‘one-stop shopping’ for affordable coverage,” according to the CCIIO website. The CGI Group, Inc. offers information technology and business process services and is headquartered in Montreal, Canada. 

The exchange marketplace, which PPACA mandates to be operational by 2014, will kick-in when  a state either refuses to establish a state health insurance exchange on its own, or when the state health insurance exchange established by a state does not meet the requirements of PPACA and the exchange rules issued by the Department of Health and Human Services ( HHS).  

The state health insurance exchange concept is a PPACA centerpiece -- designed to give individuals and small group employers an opportunity to compare health insurance offerings for standardized benefits on a cost basis. As of the end of November, 2011, 29 states had taken some action towards establishing their own state health insurance exchanges. Some states are now on the record as refusing to set up their own state exchange. If you would like to read more about your state’s progress, go here for the National Conference of State Legislatures’ excellent state by state summary of state insurance exchange activities.

Setting up a health insurance exchange is a massive undertaking. A successful health insurance exchange will have to create many of the functions that we have in place that make BenefitMall an easy-to-use resource. It also will have to create automatic enrollment interfaces for state Medicaid and federal Medicare programs, and the software to interface with the federal programs that will determine eligibility for the subsidies to be offered through the exchanges.  

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The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.

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