Premium Collection in State Based Exchanges

This issue brief, prepared by Manatt Health Solutions for the State Health Reform Assistance Network, summarizes federal policy guidance and outlines requirements, options and key considerations for State-based Exchanges (SBEs) on Exchange premium collection functionality. Exchanges organized pursuant to the Affordable Care Act (ACA) have certain requirements and several options for premium collection services for small businesses and individual consumers purchasing qualified health plans (QHPs) in 2014. While collection functionality is required in Small Business Health Options Program (SHOP) Exchanges, it is an optional service in the individual Exchanges. This brief explores the policy and operational considerations that SBEs face related to the three options for premium collections functionality:

  • The Exchange performs all premium billing and collections functions for SHOP and individual market consumers, with the option for people to pay their issuer directly, as required under the ACA;
  • The Exchange bills and collects the initial premium payment to effectuate real-time QHP enrollment; QHP issuers bill for all other months of enrollment; or,
  • The Exchange performs premium collection in the SHOP Exchange only, as required by law; QHP issuers perform the function for individual QHP enrollees.