August 26, 2009. Utah joined Massachusetts last week to become the second state to offer a health insurance exchange. The Utah Health Exchange is an internet portal where residents can find, compare, and purchase private individual and family health insurance coverage. The website also provides a standardized electronic application and enrollment process for all applicants and plans.
Under HB188, which was signed by Governor Gary Herbert in March 2009, small employers (those with 2 to 50 workers) can relieve themselves of the burden of administering an insurance plan by instead providing employees with pre-tax dollars through either a health reimbursement arrangement or a Section 125 Cafeteria Plan. Workers can then take these funds and purchase insurance through the Exchange, choosing whatever plan is best for them via user-friendly decision-making tools, such as premium contribution calculators. Families and individuals who don't get insurance through their employer can purchase insurance through the Exchange on their own.
An important feature of the Exchange is that coverage purchased through the Exchange is portable from one job to the next, since the Exchange accepts premium payments from multiple sources (simultaneously or over time): An enrollee can aggregate contributions from his/her employer and contributions from other sources, such as a second employer, a spouse's employer, state assistance programs, etc.
As of August 19th, 150 small companies (none of them exceeding 50 employees) will be part of a test launch of the Utah Health Exchange, along with uninsured individuals and families who choose to apply. (The Exchange will be available to large employer groups in late 2011, allowing some time for the Exchange to work through potential technical, outreach, and customer service glitches.)
The performance of Utah's exchange is likely to be closely monitored at the national level, since the three major congressional reform proposals (from the House Tri-Committee, Senate HELP Committee, and Senate Finance Committee) all recommend an insurance exchange of some kind.
To learn more about the Utah Health Exchange, click here.
SHARE grantee Mark Hall is studying the use of Section 125 Cafeteria Plans to purchase health insurance coverage, as seen with Utah's exchange. Specifically, Mark is evaluating the affordability, sustainability, and efficiency of the strategies used in Indiana, Massachusetts, Missouri, and New Jersey.
To read more about Mark's SHARE study, click here.
Click here to access Mark's issue brief about the legal debate surrounding Section 125 Cafeteria Plans and the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA).