	Introduction

The Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended) requires health insurance exchanges (also known as marketplaces ) to be established in every state. ACA exchanges are virtual marketplaces in which consumers and small businesses can shop for and purchase private health insurance coverage and, where applicable, be connected to public health insurance programs (e.g., Medicaid). This report provides an overview of key aspects of the health insurance exchanges. The report includes summary information about the major functions of exchanges and how they are structured. It describes individual and small business eligibility and enrollment processes, provides enrollment estimates, explains the financial assistance available to certain consumers and small businesses, and discusses consumer enrollment assistance options. The report also reviews the role of exchanges in certifying participating plans and outlines the range of plans offered through exchanges. It briefly addresses funding for the exchanges. Most states have two types of exchanges—an individual exchange and a small business health options program (SHOP) exchange . In a SHOP exchange, small businesses can compare and purchase small-group insurance and can apply for small business health insurance tax credits; in addition, employees of small businesses can enroll in plans offered by their employers on a SHOP exchange. Individual and SHOP exchanges can be operated by either the state or the federal government, as described below. If a state opts not to administer its own exchange, or if the Department of Health and Human Services (HHS) determines that the state is not in a position to do so, then HHS is required to establish and administer the exchange in the state as a federally facilitated exchange (FFE). States also may have a state-based exchange using a federal platform (SBE-FP), which means they have an SBE but use the federally facilitated information technology (IT) platform (i.e., HealthCare.gov). Consumers can use their state's exchange website (Healthcare.gov or a state-run site) to compare and enroll in plans, and the exchange websites are required to display a calculator that estimates consumers' costs after any cost-sharing reductions or premium tax credits for which they are eligible (see " Premium Tax Credits and Cost-Sharing Reductions " in this report). States with SBEs may observe different OEPs. Premium Tax Credits and Cost-Sharing Reductions

Consumers purchasing coverage through the individual exchanges may be eligible to receive financial assistance. The intent of the credit is to assist small employers with the cost of providing health insurance coverage to employees. Qualified Health Plans

In general, health insurance plans offered through exchanges must be QHPs. A QHP is a plan that is offered by a state-licensed issuer that meets specified requirements, is certified by an exchange, and covers the essential health benefits (EHB) package. QHPs must comply with the same state and federal requirements that apply to health plans offered outside of exchanges. A QHP offered through an individual exchange must comply with state and federal requirements applicable to individual market plans; a QHP offered through a SHOP exchange must comply with state and federal requirements applicable to plans offered in the small-group market.
The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) requires health insurance exchanges to be established in every state. Exchanges are marketplaces in which consumers and small businesses can shop for and purchase private health insurance coverage. In general, states must have two types of exchanges: an individual exchange and a small business health options program (SHOP) exchange.
Exchanges may be established either by the state itself as a state-based exchange (SBE) or by the Secretary of Health and Human Services (HHS) as a federally facilitated exchange (FFE). Some states have SBE-FPs: they have SBEs but use the federal information technology platform, including the federal exchange website www.Healthcare.gov. In states with FFEs, the exchange may be operated by the federal government alone or in conjunction with the state. States may have different structures for their individual and SHOP exchanges.
Consumers who obtain coverage through the individual exchange may be eligible for financial assistance from the federal government. Financial assistance in the individual exchanges is available in two forms: premium tax credits and cost-sharing reductions. Small businesses that use the SHOP exchange may be eligible for small business health insurance tax credits. The tax credits assist small businesses with the cost of providing health insurance coverage to employees.
The ACA generally requires that health insurance plans offered through an exchange are qualified health plans (QHPs). To be a certified as a QHP, a plan must be offered by a state-licensed issuer and must meet specified requirements, including covering the essential health benefits (EHB). QHPs sold in the individual and SHOP exchanges must comply with the same state and federal requirements that apply to QHPs and other health plans offered outside of the exchanges in the individual and small-group markets, respectively. Exchanges also may offer variations of QHPs, such as child-only or catastrophic plans, and non-QHP dental-only plans.
This report provides an overview of the various components of the health insurance exchanges. It begins with summary information about how exchanges are structured and then discusses both individual and SHOP exchanges in terms of eligibility and enrollment, financial assistance for certain exchange consumers and small businesses, and enrollment assistance entities. The report also describes exchanges' role in certifying plans as qualified to be sold in their marketplaces and outlines the range of plans offered through exchanges. Finally, the report briefly addresses funding for the exchanges. Where applicable, the report references other CRS reports that have more information on various topics.