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Regulation and Compliance > State Regulation

Feds complete multi-state plan regs

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The U.S. Office of Personnel Management (OPM) has completed a final version of regulations for a new Multi-State Plan Program (RIN: 3206-AM47) that is supposed to give consumers access to health plans that are similar to the plans federal employees use.

The final multi-state plan (MSP) rule is set to appear in the Federal Register March 11. The final version is based on a draft that OPM published in the Federal Register in December 2012.

The MSP section in the Patient Protection and Affordable Care Act of 2010 (PPACA) — Section 1334 — is supposed to create a new type of health plan that can operate in multiple states in a fashion similar to the way the Federal Employees Health Benefits program plans operate.

Each of the new PPACA health insurance exchanges is supposed to try offer consumers access to at least one for-profit MSP and one nonprofit MSP.

OPM published an MSP program application for insurers interested in participating in the program Jan. 18. The applications are due March 29.

Some state regulators and consumer advocates have suggested that the MSP program could give insurers the freedom to ignore important consumer protection rules. Insurers and employer groups, in turn, have warned that the MSPs could end up facing just as much state red tape as regional and national health insurers face today.

Officials at OPM, the agency that runs the federal employees’ benefit program, said in the preamble to the final rule that they want insurers in the MSP program to respect state consumer protection laws, including any state policy form review laws.

But officials said they believe the drafters of PPACA gave OPM the authority to resolve any conflicts between state rules and federal MSP program rules. 

OPM gives compliance with state form review laws as an example of its approach to federal-state relations.

OPM expects MSP issuers to comply with state form review requirements as well as other state laws, OPM officials said in the preamble.

“However, state approval of a policy form is not a precondition of OPM approval,” officials said. “OPM expects that few disagreements will arise between OPM and a state regarding form review and, if they do, we will work with the state to successfully resolve the discrepancy in a manner that is acceptable to both OPM and the particular state.”

In addition to complying with state form review rules, an MSP issuer also must comply with any state standards relating to the standard benefits package or any standard benefit design requirements, officials said.

OPM officials also talk about how they will apply a PPACA provision that will require providers of non-grandfathered individual and small group insurance to cover an “essential health benefits” (EHB) package that includes habilitative services, or different forms of therapy aimed at patients facing autism and other conditions that interfere with development.

MSP issuers must follow state habilitative services definitions in states that have habilitative services standards, officials said.

In other states “OPM will consider these comments during [MSP] contract negotiations,” officials said.

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