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
General information about this opportunity
Last Known Status
Centers For Medicare and Medicaid Services, Department of Health and Human Services
Type(s) of Assistance Offered
E - Direct Loans
Patient Protection and Affordable Care Act (PPACA), Section 1322.
Who is eligible to apply/benefit from this assistance?
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
Applicants must provide proof that they have formed a nonprofit member organization and are not prohibited from program participation.
What is the process for applying and being award this assistance?
Preapplication coordination is not applicable.
This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
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.
October 17, 2011 First Round Oct 17, 2011: First Round. Oct 17, 2011: First Round. First Round Loans o Grants.gov application due date: October 17, 2011; o 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.
Approval/Disapproval Decision 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.
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.
How are proposals selected?
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.
How may assistance be used?
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. Between 2015 and 2017, nineteen of them have ceased operations and gone into state-supervised receivership or liquidation, or otherwise left the program after settling all debt obligations to the government. 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.
What are the requirements after being awarded this opportunity?
Please refer to the FOA.
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.
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.
Other Assistance Considerations
Formula and Matching Requirements
Statutory formula is not applicable to this assistance listing.
Matching requirements are not applicable to this assistance listing.
MOE requirements are not applicable to this assistance listing.
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. The FOA will outline how assistance is awarded/released.
Who do I contact about this opportunity?
Regional or Local Office
Health and Human Services, Hubert H. Humphrey Building, Room 737F, 200 Independence Ave., SW, Washington, D.C. 20201
200 Independence Ave., SW, Room 739H
Washington, DC 20201 US
(Direct Loans) FY 18$31,171.00; FY 19 est $100,000.00; FY 20 est $0.00; FY 17$0.00; FY 16$0.00; -
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.
Examples of Funded Projects