The managers of the California health insurance exchange have hired an administrator for the small-group division.
Pinnacle is a “third-party administrator” (TPA), or independent benefit plan administrator, has been managing benefit plans for about 800 small groups in California and Arizona.
The SHOP contract calls for Pinnacle to run an exchange, or Web-based health insurance supermarket, that could eventually help as many as 375,000 California small businesses shop for health coverage.
The California SHOP exchange staff will choose the health plans to be offered, manage exchange-plan relationships, and lead marketing efforts, officials said.
Pinnacle will handle eligibility, enrollment, marketing and fulfillment services, as well as agent and general agent sales management, financial management and small business call center services.
Nuts, bolts and commissions
The Patient Protection and Affordable Care Act of 2010 (PPACA) requires the U.S. Department of Health and Human Services (HHS) to set up exchanges for individuals and small groups by Oct. 1. California is starting its own, state-based exchange.
California is using HHS PPACA funding to pay for the SHOP administration contract from now until the end of 2014, exchange officials said.
Starting in 2015, Covered California will use its own revenue to pay for the contract, officials said.