Consumers may soon be able to go to the Affordable Insurance Exchange in their state and sign up for a new type of health plan called a Consumer Oriented and Operated Plan, or “CO-OP”. CO-OPs are private, non-profit health insurers with a board made up of members who are also customers.
On July 18, the U.S. Department of Health and Human Services (HHS) proposed standards for establishing CO-OP health insurance plans., According to healthcare.gov, eligible organizations seeking to establish a CO-OP will be able to apply for a portion of the $3.8 billion in repayable loans made available under the Affordable Care Act to fund start-up and capitalization costs. The proposed standards reflect the recommendations of an independent advisory group, in which NovaRest founder Donna Novak took part, that held many hours of public testimony by consumers, small businesses and providers.
A CO-OP will have the option to sell coverage to small businesses. Small business owners will be able to go through a new competitive insurance marketplace for small businesses known as a Small Business Health Option Program or “SHOP.” The proposed rule ensures that a CO-OP that offers any coverage to small businesses also participates in SHOP.
CO-OPs will meet the same standards as all other health insurers in the state where they offer coverage. Starting January 1, 2014, CO-OPs and all other health insurers will have to meet a set of standards in order to sell health plans through the new Exchanges. As an extra protection, CO-OPs will also demonstrate that premiums and any federal loans are being used appropriately and for the benefit of enrollees.
The rule also proposes that CO-OPs have a management team with expertise in health insurance, and that the board includes individuals with expertise in the business of insurance.