42 U.S.C. § 18041 — State flexibility in operation and enforcement of Exchanges and related requirements

(a) Establishment of standards The Secretary must, as soon as practical after March 23, 2010, issue regulations setting standards for: building and running Exchanges, including SHOP Exchanges; offering qualified plans through them; setting up reinsurance and risk-adjustment programs; and any other requirements the Secretary decides are needed. This does not cover standards for certain other subtitles, which the Secretary issues separately under the Public Health Service Act. In writing these regulations, the Secretary must consult the National Association of Insurance Commissioners, insurers, consumer groups, and other selected people, aiming for balanced representation. (b) State action Each state that chooses to follow these federal standards must, by January 1, 2014, have in effect either the federal standards themselves, or a state law or regulation the Secretary decides accomplishes the same thing. (c) Failure to establish Exchange or implement requirements If a state does not choose to follow the federal standards, or if the Secretary decides by January 1, 2013 that a state that did choose to follow them will not have a working Exchange by January 1, 2014, or has not done what is needed to meet the other standards, the Secretary must build and run an Exchange in that state instead, directly or through a nonprofit, and take whatever action is needed to implement the other requirements. Federal enforcement authority under a related Public Health Service Act provision applies to enforcing these standards, without the usual limits on applying that provision to group health plans. (d) No interference with State regulatory authority This law does not override any state law that does not block this law's own provisions. (e) Presumption for certain State-operated Exchanges If a state was already running its own Exchange before January 1, 2010, and had insured at least as large a share of its population as this law is projected to cover nationally, and that state wants to keep operating its Exchange under this section, the Secretary must presume it meets the standards, unless the Secretary later determines, through the process described below, that it does not. The Secretary must set up a process to work with that state to help bring its Exchange into full compliance.