Consumer Operated and Oriented Plan [CO-OP] Program

To provide assistance to applicants for activities related to establishing and maintaining a Consumer Operated and Oriented (CO-OP), nonprofit health insurance issuer.


Please refer to the Funding Opportunity Announcement (FOA)
for additional information.



Agency - Department of Health and Human Services

The Department of Health and Human Services is the Federal government's principal agency for protecting the health of all Americans and providing essential human services, especially to those who are least able to help themselves.

Office - See Regional Agency Offices.

Health and Human Services, Hubert H.

Humphrey Building, Room 737F, 200 Independence Ave., SW, Washington, D.C.

20201.
Website Address

http://www.cms.gov




Program Accomplishments

Fiscal Year 2016: N/A. Fiscal Year 2017: N/A. Fiscal Year 2018: No Current Data Available

Uses and Use Restrictions

Section 1322 of The Patient Protection and Affordable Care Act (PPACA), calls for the establishment and continuation of the CO-OP Program, which will foster the creation and maintenance of qualified nonprofit health insurance issuers to offer competitive health plans in the individual and small group markets.

The American Taxpayer Relief Act of 2012 (ATRA) rescinded, as of the date of enactment, ninety percent of the unobligated balance under Section 1322 of the PPACA, transferred the remaining ten percent of the unobligated balance to the Consumer Operated and Oriented Plan Program Contingency Fund, and rescinded authority to further issue CO-OP loans.

As of the date of the rescission, CO-OP loan agreements had closed with 24 CO-OP borrowers.

The loan agreement with one of those borrowers was terminated in 2013 before the entity had obtained an insurance license.

The other 23 borrowers became licensed licensed.

One of them entered into a state-supervised liquidation proceeding in February of 2015.

Although CMS no longer has the authority to make loans to new borrowers, Section 644 of ATRA authorizes CMS to continue to provide assistance and oversight to existing CO-OPs as they work to achieve program milestones and maintain viable CO-OPs in each state in which they operate.

No further funding is available to borrowers under the original Funding Opportunity Announcement (FOA) published on December 9, 2011, Number OO-COO-001.

The CO-OP Program awards two types of loans: Start-up Loans: Start-up Loans are intended to assist applicants with the start-up costs associated with establishing a new health insurance issuer, such as: renting or developing administrative technology systems; renting or developing provider networks; hiring counsel and consultants to assist with State licensure requirements; hiring actuaries and management staff; conducting community and prospective member education; developing strategic plans to build enrollment; developing plans for quality improvement, member and provider services, and grievances and appeals systems with feedback loops to improve operations; establishing and participating in a private purchasing council; and other start-up costs.

Start-up Loans cannot be used to fund costs associated with construction of facilities, including clinical facilities, nor can Start-up Loans be used for clinical expenses, such as provider salaries or payments, provider clinical space or administrative staff associated with clinical functions, and clinical equipment.

These items are intended to be covered by the premiums and reflected in the reimbursement to providers.

Funds drawn from Start-up Loans must be repaid witrhin five years of disbursement.

Solvency Loans: Solvency Loans are intended to assist eligible entities with meeting the solvency and capitalization requirements of states in which they do business.

Funds drawn from Solvency Loans must be repaid within 15 of disbursement.

Loan recipients must use the loans awarded under the CO-OP program to fund the activities proposed and approved in the loan recipient?s application, consistent with the terms of the CO-OP?s loan agreement with CMS.

Loan recipients are prohibited from using the loans awarded under the CO-OP program to conduct marketing or carry on propaganda and other activities attempting to influence legislation.

Additional information on both start-up and solvency loans can be found in the original FOA for this program, to acquire details on each type of loan and the requirements for each type of loan?s use and repayment.

Loan recipients must use the loans awarded under the CO-OP program to fund the activities proposed and approved in the loan recipient?s application consistent with the terms of the organization?s loan agreement with CMS.

Loan recipients are prohibited from using the loans awarded under the CO-OP program to conduct marketing or carry on propaganda and other activities attempting to influence legislation.

Start-up Loans: Start-up Loans are required to be repaid five years after each drawdown of funds.

Solvency Loans: Solvency Loans are required to be repaid 15 years after each drawdown of funds.

Please refer to the FOA for this program for more detail on each type of loan and the requirements for each type of loan?s use and repayment.

Eligibility Requirements

Applicant Eligibility

TTo be eligible to apply for a loan under the CO-OP program, an applicant must: 1.

Intend to become a CO-OP; 2.

Have formed a private nonprofit member organization (see Section IV.B of the FOA for acceptable evidence of certified nonprofit status).

; 3.

Submit in its loan application an Eligibility Affidavit and Application Certification signed by the applicant?s Chief Executive Officer, Chief Financial Officer, or an officer of the applicant?s Board of Directors, certifying the accuracy, completeness, and truthfulness of all information contained in the loan application; and certifying that, if the applicant organization is awarded loan(s) under this FOA, it will repay them according to the terms laid out in this FOA, finalized in 45 CFR part 156 subpart F, and in the Loan Agreement issued when the award is announced.

The signatory must be legally authorized to bind the CO-OP.

For a description of the Eligibility Affidavit and Application Certification, see Section IV.B.10.

4.

Commit to offering a CO-OP qualified health plan at the silver and gold benefit levels in every individual market Exchange that serves the geographic regions in which it is licensed and intends to provide health care coverage; and 5.

If choosing to offer at least one plan in the small group market outside the Exchange, commit to offering a CO-OP qualified health plan at both the silver and gold benefit levels in each Small Business Health Options Program (SHOP) that serves the geographic regions in which the organization offers coverage in the small group market; and 6.

Commit that at least two-thirds of the contracts issued by the CO-OP will be CO-OP qualified health plans offered in the individual market or individual and small group markets of the States in which the CO-OP is licensed.

Beneficiary Eligibility

Not applicable.

Credentials/Documentation

Applicants must provide proof that they have formed a nonprofit member organization and are not prohibited from program participation. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.

Aplication and Award Process

Preapplication Coordination

Preapplication coordination is not applicable.

Environmental impact information is not required for this program.

This program is excluded from coverage under E.O.

12372.

Application Procedures

This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

Award Procedures

All qualified applications will be forwarded to objective external reviewers. The CMS program official with delegated authority is responsible for final selection and funding decisions. In making these decisions, the program official will take into consideration: recommendations of the external reviewers; reviews for programmatic and grants management compliance; the reasonableness of the size of the loan request and anticipated results of funding the application; ability to repay the loan; and the likelihood that the proposed project will result in the benefits expected. CMS reserves the right to conduct pre-award Budget Negotiations with potential loan recipients. Notification is made in writing by a Notice of Award.

Deadlines

Oct 17, 2011: First Round. Oct 17, 2011: First Round. Oct 17, 2011: First Round. First Round Loans ? Grants.gov application due date: October 17, 2011; ? First loan award date: February 17, 2012 and applications were accepted on a rolling basis until the passage of ATRA. The last loan award to fund the creation of a new CO-OP was awarded in December 2012. Subsequent loans for additional funding to existing borrowers will be awarded as funding is available.

Authorization

Patient Protection and Affordable Care Act (PPACA), Section 1322.

Range of Approval/Disapproval Time

From 60 to 90 days. Loan awards or a response to the application will be provided approximately 75 days after each applicant receives notice that its application is complete.

Appeals

An applicant may request reconsideration of a loan application determination. Any determination made by CMS with respect to that loan application as a result of reconsideration is final and is not subject to reconsideration, appeals, or other administrative or judicial review related to that specific loan application. However, an applicant is not prohibited from submitting an entirely new loan application.

Renewals

Not Applicable.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula. This program has no matching requirements. This program does not have MOE requirements.

Length and Time Phasing of Assistance

Start-up Loans must be repaid within 5 years of the date of each drawdown and Solvency Loans must be repaid within 15 years of the date of each drawdown. See the following for information on how assistance is awarded/released: The FOA will outline how assistance is awarded/released.

Post Assistance Requirements

Reports

Start-up and Solvency Loan Recipients.

All successful applicants under this announcement must comply with the following reporting and review activities: a.

Monthly Reporting.

Loan recipients must provide the Account Manager information related to enrollment on a monthly basis.

b.

Quarterly Reporting (NAIC Report).

Loan recipients must provide Account Managers with information that is reflected in regulatory filings on a quarterly basis.

c.

Semi-Annual Progress Report.

Loan recipients must provide the Account Manager on a semi-annual basis, information such as, but not limited to: progress on the goals, objectives, milestones, and activities identified in its Business Plan and the Loan Agreement; accomplishments, barriers, and lessons learned; data on the loan recipient?s responsiveness to member grievance, maintenance of consumer control, and quality of care.

More details of the semi-annual progress report are outlined in the Loan Agreement and loan recipients were provided with a reporting template. d.

Changes/updates in the business plan.

e.

Updated financial reports and Pro forma reports.

f.

Annual Program Report; In addition to the semi-annual progress report, each loan recipient will be required to submit a program report annually, such as, but not limited to: updated financial reports and Pro forma reports; certification of compliance with all applicable state insurance regulation or an explanation of any deficiencies or adverse actions or determinations by state insurance regulators and a timeline for resolving all issues with state insurance regulators; an updated Business Plan.

More details of the annual program report are outlined in the Loan Agreement and loan recipients were provided with a reporting template.

g.

Marketplace Rate Analysis, varies per state.

h.

Corrective Action Plan (CAP).

If CMS concludes that a loan recipient has not complied with the requirements set forth in Section 1322 of the Patient Protection and Affordable Care Act, 45 CFR part 156 subpart F, or in its Loan Agreement, CMS may require the loan recipient, via a notice of violation, to develop and submit a CAP and implement the CAP as approved by CMS.

1.

The loan recipient must submit, for CMS approval, a CAP by the deadline indicated on the notice of violation.

2.

The CAP must specify the actions that the loan recipient will take to ensure that the loan recipient, its members, its providers and suppliers, and contracted entities performing services or functions on its behalf, will correct any deficiencies and remain in compliance with program requirements.

3.

CMS will monitor the loan recipient?s performance during the CAP process.

4.

Failure to submit, obtain approval for, or implement a CAP may result in termination of the loan agreement, as may failure to demonstrate improved performance upon completion of the CAP.

i.

Enhanced Oversight Plan (EOP).

CMS may place a loan recipient in an EOP (used in lieu of implementing a CAP, or in conjunction with a CAP), if the loan recipient consistently underperforms or repeatedly has difficulty in meeting program milestones and benchmarks, as identified in its loan agreement.

Under an EOP, CMS will conduct stronger and more frequent review of the loan recipient?s operational and financial status.

In addition, CMS may provide technical assistance if CMS determines that doing so would improve the performance of the loan recipient and increase the likelihood of loan repayment.

j.

Transparency Act Reporting Requirements.

New awards issued under this funding opportunity announcement are subject to the reporting requirements of the Federal Funding Accountability and Transparency Act (FFATA) of 2006 (P.

L.

109?282), as amended by section 6202 of Public Law 110?252 and implemented by 2 CFR Part 170.

Recipients must report information for each first-tier sub award of $25,000 or more in Federal funds and executive total compensation for the recipient?s and sub recipient?s five most highly compensated executives as outlined in Appendix A to 2 CFR Part 170 (available online at www.fsrs.gov).

The report identifies cash transactions and expenditures against the authorized funds for the loan.

Please refer to the description provided in Reports (111) (c.) of this template for information on the semi-annual progress report; loan recipient also submits quarterly regulatory filings submitted to state regulators and the NAIC.

Each loan recipient must also submit a quarterly electronic SF 425, via the Payment Management System.

The report identifies cash transactions and expenditures against the authorized funds for the loan.

Please refer to the FOA.

Each loan recipient must submit a quarterly electronic SF 425 via the Payment Management System.

The report identifies cash transactions and expenditures against the authorized funds for the loan.

Please refer to the description provided in Reports (111) a.

of this template for information on the semi-annual progress report.

Each loan recipient must submit a quarterly electronic SF 425 via the Payment Management System.

The report identifies cash transactions and expenditures against the authorized funds for the loan.

Please refer to the FOA.

Audits

In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. A loan recipient must comply with the requirements contained in the Funding Opportunity Announcement and its loan agreement, specifically, the Right to audit. The loan recipient must agree, and must require its providers, suppliers, and contracted entities performing services or functions on behalf of the loan recipient to agree, that HHS, the Comptroller General, the OIG or their designees have the right to audit, inspect, and evaluate any books, contracts, records, documents, and other evidence of the loan recipient, and its providers and suppliers, and contracted entities that pertain to?(1) The loan recipient?s compliance with program requirements. CMS may conduct onsite performance reviews and site visits. The timing of any performance review and any site visit is at the discretion of CMS. CMS has to conduct these audits of all loan recipients within the first 12 months post-award. Following the first audit, regular audits will be conducted at least every three years. CMS also can perform ad-hoc or focused audits of CO-OP at their discretion and independent of the timing of the planned on-site audits. review and any site visit is at the discretion of CMS. CMS has to conducted these audits of all loan recipients within the first 12 months post-award. Following the first audit, regular audits will be conducted at least every three years. CMS also can perform ad-hoc or focused audits of CO-OP at their discretion and independent of the timing of the planned on-site audits.

Records

A loan recipient must comply with the requirements contained in the Funding Opportunity Announcement (FOA) and its loan agreement, specifically, the Maintenance of records. A loan recipient must agree and must require its providers, suppliers, and contracted entities performing functions or services on behalf of the loan recipient to agree to the following: (1) To maintain and give HHS, the Comptroller General, OIG, or their designees access to all books, contracts, records, documents, and other evidence sufficient to enable the audit, evaluation, and inspection of the loan recipient?s compliance with program requirements; (2) To maintain such books, contracts, records, documents, and other evidence for a period of 10 years from the final date of the repayment period or from the date of completion of any audit, evaluation, or inspections, whichever is later, unless ? (i) CMS determines there is a special need to retain a particular record or group of records for a longer period and notifies the loan recipient at least 30 days before the normal disposition date; (ii) There has been a termination, dispute, or allegation of fraud or similar fault by the loan recipient, its providers, suppliers, or contracted entities that perform functions or services on its behalf, in which case the loan recipient must retain records for an additional 6 years from the date of any resulting final resolution of the termination, dispute, or allegation of fraud or similar fault; (iii) There is a reasonable possibility of fraud or similar fault by the loan recipient or its providers and suppliers, or contracted entities performing services or functions on behalf of the loan recipient, in which case CMS may inspect, evaluate, and audit the loan recipient at any time while the loan funds are in repayment; and (3) Notwithstanding any arrangements between or among a loan recipient and its members, providers and suppliers, and contracted entities performing functions or services on its behalf, the loan recipient must have ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its loan agreement with CMS, including the requirements set forth in this section.

Financial Information

Account Identification

75-0118-0-1-551.

Obigations

(Direct Loans) FY 16 $0; FY 17 est $0; and FY 18 est $0

Range and Average of Financial Assistance

Loan Range: $56,656,900 to $265,133,000 Average Loan Size: $ $106,278,338.

Regulations, Guidelines, and Literature

Applicants should refer to the FOA for applicable regulations, guidance, and/or literature.

Information Contacts

Regional or Local Office

See Regional Agency Offices. Health and Human Services, Hubert H. Humphrey Building, Room 737F, 200 Independence Ave., SW, Washington, D.C. 20201.

Headquarters Office

Reed Cleary 200 Independence Ave., SW, Room 739H, Washington, District of Columbia 20201 Email: Reed.Cleary@cms.hhs.gov Phone: 301-492-4127

Criteria for Selecting Proposals

In awarding initial start-up and solvency loans, CMS evaluated applications (based upon type of loan) using factors identified in the FOA. Please refer to the FOA for additional evaluation criteria. In awarding additional funding to existing borrowers, CMS evaluates the applications on the ability to demonstrate that the additional loan funding would assist the existing borrower applicant in establishing and maintaining a viable CO-OP, including ability to repay the loan.



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