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Q:  If a state refuses to allow the federal government to operate a healthcare exchange in their state, can the state elect to take over at any point? If not, what is the deadline to decide to cooperate and construct an exchange? 2014?

By - Last modified: January 31, 2013 at 11:43 AM

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A:  A state that does not obtain initial federal approval for a state-based exchange by Jan. 1, 2013, can seek approval for a subsequent year.

However, the state must obtain such approval at least 12 months prior to the exchange's first effective date and must work with the U.S. Department of Health and Human Services to plan the transition from the federally facilitated exchange, which will have been put in place for 2014, to the then-approved state-based exchange.

In addition, the states also have a "hybrid" option known as a State Partnership Exchange ("SPE").

Recently, the federal government issued new guidance to states on these "hybrid" exchanges that will be operated in partnership with the federal government. The guidance outlines options for states to offer input on the operation of the federal exchange. It also outlines options for states to take eventual ownership over components of the federal exchange.

To operate an SPE in 2014, a state must complete the relevant portions of the federally issued "exchange blueprint" and be approved, or conditionally approved, by the federal government for the functions and activities the state will perform.

States have until Feb. 15, 2013, to submit a declaration and Blueprint Application for approval as a SPE for the 2014 coverage year. States planning to transition to a state-based exchange for plan year 2015 must submit a declaration letter and a blueprint application to HHS by Nov. 18, 2013.

Question submitted by Elan

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