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The Center for Consumer Information & Insurance Oversight


Exchange Establishment Cooperative Agreement Funding FAQs

Below are a number of Frequently Asked Questions (FAQs) about funding available to States under Affordable Care Act Section 1311(a).  These FAQs are applicable to the Funding Opportunity Announcement (FOA), released in June 29, 2012,  Cooperative Agreement to Support Establishment of Affordable Care Act’s Health Insurance Exchanges, and related 1311 Funding (“new FOA”), which can be found at - Opens in a new window , search for CFDA number 93.525. They also apply to prior Funding Announcements, most recently amended November 29, 2011 (old “FOAs”) found at:

Q1: In the new funding opportunity announcement (FOA), released in June 29, 2012, States may be awarded establishment grants through December 2014.  Does this change the deadlines for State Exchange approval?
A1: No. The new FOA does not change the deadlines for State Exchange approval, which are set forth in the Affordable Care Act and regulations.

Q2: How many opportunities remain for States to apply for funding?
A2: Ten additional opportunities for States to apply for Level One and/or Level Two funding were announced under the new funding opportunity announcement, with all awards made by December 31, 2014.

In addition to the final funding opportunity under the old FOA, HHS anticipates Level One Establishment and Level Two Establishment applications will be due: August 15, 2012; November 15, 2012; February 15, 2013; May 15, 2013; August 15, 2013; November 15, 2013; February 14, 2014; May 15, 2014; August 15, 2014; and October 15, 2014. HHS anticipates making Notices of Grant Award approximately 45 days after application due dates.

Note: On November 30, 2012, an additional application deadline of December 28, 2012 was added for States to apply for Exchange Establishment Funding.

Level One and Level Two Exchange Establishment Application Due Dates: December 28, 2012; February 15, 2013; May 15, 2013; August 15, 2013; November 15, 2013; February 14, 2014; May 15, 2014; August 15, 2014; October 15, 2014

Q3: What Exchange costs can be covered by 1311 grant funding?
A3: The Affordable Care Act provides the Secretary authority to provide §1311(a) grant funds for State activities related to establishment of an Exchange, including establishment of a State-based Exchange, development of functionalities that allow the State to participate in a State Partnership Exchange, and State activities to establish interfaces with the Federally-facilitated Exchange.  These costs are outlined in the new FOA as well as in prior FOAs.

The first year of Exchange activity is critical to ensuring Exchange self-sufficiency. The establishment of an Exchange and activities related to such establishment also include start-up year expenses to allow consumer outreach, testing and necessary improvements during the initial start-up year.  For example, in the start-up year, we anticipate significant resources will be committed to enhancing systems, developing protocols, raising consumer awareness, training staff, and strengthening the overall effectiveness of operations. Thus, the Secretary has determined that §1311(a) grant funds are available to fully fund Exchange-related expenses (in the State’s approved work plan and budget) until: 1) the end of the start-up year that coverage is provided through the Exchange, 2) the time a State-based Exchange becomes self-sufficient, or 3) §1311(a) grant funds have been expended, whichever comes first.

Similarly, a Partnership Exchange State may receive funding for its start-up year expenses supporting the FFE in a Partnership model, as well costs associated with transition to and establishment of a State-based Exchange. These funds are available to cover the costs of approved start-up year expenses or State activities in a State-based or State Partnership Exchange, consistent with the terms and conditions of the grant award and the expiration of the project period.  States participating in the Federally-facilitated Exchanges may also receive funding to support a transition to a Partnership Exchange or State-based Exchange.

These FAQs apply to awards under this FOA and any grants awarded under prior FOAs (Exchange Establishment Cooperative Agreement Funding). Please note that HHS will not grant new awards after December 31, 2014. Per standard grants management policy, CMS will review project plans to avoid duplicative funding of expenses involved in any transition.

Q4: What is the last day that a State can spend its award?
A4:  Grantees are encouraged to drawdown funding within their budget period (up to one year for Level One and up to three years for Level Two grants); however, at the recommendation of CCIIO’s State Officer and at the discretion of the Grant Management Officer, grantees may receive a no-cost extension that will allow them to spend funding up to the expiration date of the project period.  At HHS’s discretion, a project period can be extended for a maximum of five years past the date of the award. Note, however, that all spending of §1311(a) funds awarded under a cooperative agreement must be consistent with the scope of the statute, FOA, and terms and conditions of the awarded cooperative agreement.