In preparation for the establishment of Arkansas-based health insurance exchanges, the state Insurance Department hopes to transfer up to $22 million in federal grant money to a state-created nonprofit organization, Insurance Commissioner Allen Kerr said Wednesday.
Also Wednesday, the board of that nonprofit, the Arkansas Health Insurance Marketplace, awarded a $622,000 contract to a Chicago company to monitor the implementation of the state's small-business health insurance exchange.
The Insurance Department was awarded the grant money to provide information to consumers and regulate the plans offered on the federally run health exchanges, which are accessible through the healthcare.gov website.
The U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services won't allow the Insurance Department to spend the money after June 30, but it would allow the marketplace to use the money for one additional year to support the state's transition to state-based exchanges, Kerr said.
The Insurance Department likely would continue performing some duties under a contract with the marketplace, Kerr said.
"What we want to do is get back to regulation only," Kerr told the board. "Insurance sales or policy sign-up is really under the purview of AHIM [the marketplace]."
The grant money funds the Insurance Department's Health Connector Division, which has 18 employees and an annual budget of about $4.4 million.
The division helps regulate the plans on the exchange, provides training to insurance agents and outreach workers, and operates a consumer call center.
The marketplace already was planning to take over some of the division's responsibilities, but the organization's officials didn't learn until "pretty recently" about the need to transfer the grant money, marketplace Executive Director Cheryl Smith Gardner said.
As part of the transfer, the board will need to approve changes to an agreement between the Insurance Department and marketplace spelling out how the transition to a state-based exchange will occur, board member Chris Parker said.
"Some of it is in the nature of relabeling and changing the flow of money, but some of it is going to be functional transition," Parker said.
Created by the Legislature in 2013, the marketplace is using money from a $99.9 million federal grant to establish the Arkansas-based exchanges.
Enrollment in the small-business exchange is scheduled to begin in November for coverage that will start next year.
For individual consumers, enrollment will begin next year for coverage that will start in 2017.
The Insurance Department's $22 million in unspent grant funds includes about $9.4 million earmarked for outreach activities that the Legislature has prohibited the department from conducting, department spokesman Seth Blomeley said in an email.
How the marketplace will handle outreach for the open-enrollment period that will start Nov. 1 hasn't been decided, marketplace spokesman Heather Haywood said.
The marketplace board last month hired Reston, Va.-based hCentive to build the small-business exchange and operate it through February 2018 for just under $7.2 million.
On Wednesday, it selected CSG Government Solutions to monitor hCentive's work.
Of three finalists for the contract, CSG had the highest bid, at $622,468. But the marketplace staff rated CSG the highest on technical factors.
Reston, Va.-based Maximus, which ranked second on technical factors, bid $330,000. Atlanta-based First Data bid $498,400.
Factoring in price with the technical scores, the marketplace staff rated Maximus the highest, followed by CSG and First Data.
Some board members expressed concern that Maximus had budgeted only 1,370 employee hours for the project, compared to 3,776 for CSG and 3,768 for First Data, and that Maximus planned to assign much of the work to a subcontractor.
Metro on 03/19/2015