Exchange Establishment Cooperative Agreement Funding FAQs

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 Announcements (FOA), released November 29, 2011 and June 29, 2012. The FOA can be found at, search for CFDA number 93.525.

Table of Contents

About the Funding Opportunity  

Q1: What is this funding opportunity?
A1: This Funding Opportunity provides States, the District of Columbia, and consortia of States, with financial assistance for the establishment of Exchanges. Grant Awards made under this FOA will provide funds for States to complete activities for achieving approval in accordance with§ 1321 of the Affordable Care Act and the requirements established through the rulemaking process (45 C.F.R. § 155.105 (77 Fed. Reg. at 18446)). Funds may be awarded through the end of 2014 to support State activities to establish a State-based Exchange, interface with the Federally-facilitated Exchange, or to develop activities under the State Partnership Exchange Plan Management and/or Consumer Assistance model. (Please refer to Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchange and General Guidance on Federally-Facilitated Exchanges available at for information on the Exchange models.)

Q2: What grants are available through this announcement?
A2: States may choose whether to apply for Level One Exchange Establishment or Level Two Exchange Establishment grants.

Level One Exchange Establishment. These grants provide up to one year of funding to States that are interested in undertaking specific activities in establishment of a State-based Exchange, a Federally-facilitated Exchange, or State Partnership Exchange. The Level One Establishment grants are open to all States and States can apply for additional years of funding.

Level Two Exchange Establishment. These grants provide up to three years of funding to States that are establishing a State-based Exchange and can demonstrate capacity to establish the full set of core Exchange activities. States must meet specific eligibility criteria, including legal authority to establish and operate an Exchange that complies with Federal requirements available at the time of the application, governance structure for the Exchange, and an initial plan discussing long-term operational costs of the Exchange. States may only receive one Level Two Exchange Establishment grant.

Q3: Can a State apply for a Level One Exchange Establishment grant after receiving a Level Two Exchange Establishment grant?
A3: Yes. States that have previously received a Level Two Exchange Establishment Cooperative Agreement may apply for additional funds as a Level One applicant; however, the scope of the application must be limited to activities not within the scope of the prior Level Two Cooperative Agreement.

Q4: If a State initially applied for funding for a State-based Exchange, can that State transition to another Exchange model?
A4: Yes. This funding opportunity allows States the flexibility to transition between Exchange models over time. For example, a State might choose to operate within the Federally-facilitated Exchange in 2013-14, as a Plan Management Partner in the Federally-facilitated Exchange in 2014-15, and, finally, as an approved State-based Exchange in 2015-forward.

Q5: Through the June 2012 FOA, States may be awarded Establishment grants through December 2014. Does this mean my State’s Exchange does not have to be approved until December 2014?
A5: No. This FOA does not change the deadlines for Exchange approval or operation set forth in the Affordable Care Act and regulations.

Application Process

Q6: Who is eligible to apply for this FOA?
A6: This funding opportunity is open to States, consortia of States, and the District of Columbia. The Governor (the Mayor, if from the District of Columbia) may designate a governmental agency or quasi-governmental entity to apply for grants on behalf of that State. Exchanges that have been established by the State as non-profits are eligible to apply for funding if designated as the applicant entity by the State due to their quasi-governmental nature.

Q7:  What are the due dates for this FOA?
A7: All grant applications must be submitted electronically and be received through - Opens in a new window by 11:59 pm Eastern Time on the respective due dates below:

Level One Exchange Establishment

Application Due Dates: 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; October 15, 2014

Level Two Exchange Establishment

Application Due Dates: 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; October 15, 2014

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

Q8: What are the potential award dates for under this FOA?

A8: The anticipated award date for both Level One Exchange Establishment and Level Two Exchange Establishment awards is approximately 45 business days after each application due date.

Q9: What is the period of performance for awards made under this FOA?
A9: The project period for each award will vary based on when a State is awarded an Exchange Establishment Cooperative Agreement. Level One Exchange Establishment awards will be for up to one year after the date of award. Level Two Exchange Establishment awards will be for up to three years after the date of award.

Q10: What level of funding is available under this FOA?
A10: Funds are available to support grants as necessary to fulfill the purpose of this funding opportunity to the fifty States, District of Columbia, and/or consortia of States. The award amount will vary based on application category and the specific needs of each State.

Q11: Will HHS provide any guidance or assistance on completing the application process?
A11: HHS will hold pre-application conference calls for potential applicants.  The conference calls will provide an overview of this project and budget guidance; review the instruction provided by this Funding Opportunity Announcement and other available materials; and will include an opportunity for States to ask questions.  A schedule of pre-application calls will be on the CCIIO website:  /cciio/Resources/Forms-Reports-and-Other-Resources/index#Planning and Establishment Grants.

Q12: How do I download and submit the application?
A12: You can access the electronic application for this project on - Opens in a new window . You must search the downloadable application page by the CFDA number (93.525). On the website, you also will find information about submitting an application electronically through the site.

Q13: Should the documents that are submitted as attachments to the grant application be in PDF or Word format?
A13: and the awarding agency will accept Word or PDF attachments. However, if an applicant submits an attachment in Word and receive an error message regarding the attachment, the applicant should convert the Word attachment into a PDF attachment and then resubmit the application. Note: requires each attached file to have a unique file name.

Q14: What if a State has an ongoing issue with obtaining the Central Contractor Registry (CCR) number or the correct Dun and Bradstreet (D&B) Data Universal Numbering System (DUNS) number?
A14: If a State has ongoing issues with obtaining a CCR or DUNS number, it must receive a case number from the respective system. The State should then inform the awarding agency of the delay and provide the case number.

Q15: Who are the points of contact for questions related to these grants?
A15: For questions about the grant announcement, please contact:

Michelle Feagins
Office of Acquisition and Grants Management
Department of Health and Human Services
(301) 492-4312

For questions about programmatic issues related to the grant, please contact:

Katherine Bryant
Center for Consumer Information and Insurance Oversight
Centers for Medicare & Medicaid Services
Department of Health and Human Services
(301) 492-4446


Uses of Funds

Q16: Can a State be reimbursed for pre-award costs under this FOA? For example, if a State is ready now to begin activities related to the Exchanges and it does not want to delay planning and other activities until it receives grant funding, can the State charge to future grants the costs it is incurring now?
A16: The State may seek reimbursement for pre-award costs provided that the costs are allowable costs incurred up to 90 days before grant award that cannot be covered under existing funding. Written approval must be provided by HHS and the budget narrative and work plan should clearly identify the funds that were spent prior to the project period.

Q17: Is it permissible to use the grant funds for State travel costs to Federally-sponsored meetings related to the grants?
A17: Yes, the grant funds can be used for State travel costs to Federally-sponsored meetings related to the grants. To the extent possible, these costs are to be outlined in the budget narrative.

Q18: May these grant funds be used primarily to hire personnel?
A18: These grant funds must be used for activities related to establishing Exchanges. The proportion of grant funds used to hire or contract with personnel for these activities will depend on the needs of the grant applicant.

Q19: Can a state that wants to be a Consumer Assistance State Partner, but also wants to do state-specific outreach and education, apply for Exchange Establishment grant funding to cover those costs?
A19: Yes, CMS envisions a collaborative model around consumer outreach and education in the Consumer Assistance Partnership.  All Exchanges will provide consumer assistance, outreach, and education.  We encourage states involvement in these activities even if the state is not directly operating a State-based Exchange.  States can apply for §1311(a) grant funding to support its work in collaborating with CMS to perform these activities in connection with its Exchange.


Q20: The FOA requires applicants to provide documents confirming actual or pending agreements with subcontractors. How does a State identify subcontractors in its proposal if it doesn’t know who it will be subcontracting with due to State procurement requirements?
A20: If a State cannot name specific subcontractors, it should indicate this in the proposal and identify the tasks a subcontractor may perform.

Q21: Can a State contract out a majority of the work associated with the grant?
A21: Yes. The State remains responsible for ensuring that all subcontractors comply with the terms and conditions of the grant.

Post-Award Activities

Q22: May a State amend its grant proposal?
A22: Yes. A State grantee may request changes to a grant award. If a grantee would like to make a substantive amendment to its grant award after the project year has begun, that change will be considered a Change in Scope and must be approved by CCIIO. A request for approval of the Change in Scope must be submitted to the Program Official. Only after the Change in Scope is approved by CCIIO and the grantee receives a written response can the grantee alter the award.

Q23: May a State change the principal investigator on the grant?
A23: A change of principal investigator is a substantive change; a State will have to seek prior approval from CCIIO before instituting any such change.

Q24: After the States have been awarded funding and conduct their Exchange activities, does CCIIO have plans to share best practices?
A24: States are expected to carry out due diligence in seeking opportunities for reuse, sharing, and collaboration in Exchange Activities. States are to evaluate opportunities for reuse of materials and knowledge from within their own State, as well as other States, and the Federal Exchange(s). States are encouraged also to identify opportunities for collaboration with other States that might help reduce both development and long-term operating costs of their Exchange.  HHS will work closely with States during the project period to help them identify opportunities for both reuse and collaboration.


Q25: Some States already operate an Exchange. Do these States qualify for Exchange Establishment grants?
A25: Yes. States that already have an Exchange may use Exchange grants to fund activities related to implementing changes necessary to bring their existing Exchange into compliance with the Exchange requirements set forth in the Affordable Care Act.

Q26. How can individuals and the general public be involved in the establishment process for the Exchanges?
A26:  States may continue the stakeholder consultation initiatives begun during the planning phase throughout the establishment process. Stakeholder consultation was required as part of activities in connection with Exchange Planning grants. Stakeholders include, but are not limited to, consumer organizations, small business organizations, health plans, safety net associations, and faith based organizations.  All States were required to seek stakeholder input and involvement in planning for Exchanges.  Additionally, all States have to meet a standard of transparency and accountability if they elect to establish a State-based Exchange.  CCIIO will monitor this aspect of the Establishment grants and provide technical assistance to share best practices in this area.

Q27: Are there parameters defining what constitutes excessive executive compensation?
A27: Only allowable costs may be paid using grant funds.  Executive compensation must be an allowable cost and should reflect the market rate for a similar position in your area.

For more information relating to allowable costs, see the OMB Circular A-110, item #27, at

New grantees awarded under this Funding Opportunity Announcement should be aware they are subject to the reporting requirements of the Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 109-282), as amended by section 6202 of P.L. 110-252, and implemented by 2 CFR 170.  Grant and cooperative agreement recipients must report information for each first-tier subaward of $25,000 or more in Federal funds and executive total compensation for the recipient’s and subrecipient’s five most highly compensated executives.

Q28: What type of technical assistance will be available to States?
A28.  The program offers many types of technical assistance to States, including:

■Conference calls
■“Office hours” with program staff at industry conferences and meetings
■Grantee conferences/meetings

Page Last Modified:
09/06/2023 05:05 PM