FFM? SBE? What's it mean?

I began my journey into Affordable Care Act filings about three years ago, and at first, the acronyms and terms were quite confusing. Understanding the nuances took time and experience. Hopefully you can take away some of that knowledge.

Patrik Gammon

4/2/20252 min read

a magnifying glass sitting on top of a piece of paper

What is a health insurance marketplace?

An insurance exchange is also sometimes called a "health insurance marketplace". It describes a platform designed to allow individuals, families, and small businesses to compare and purchase health insurance plans. These exchanges were established under the ACA to provide transparency, promote competition among insurers, and make healthcare coverage more accessible and affordable. The Federally Facilitated Marketplace is sometimes referred to as "Healthcare.gov" as this is the web URL for the service.

But not every state uses Healthcare.gov for their insurance plans, and this is why it's important to recognize the regulatory differences between a State-Based Exchange (SBE) and a Federally Facilitated Marketplace (FFM) Filing.

Federally Facilitated Marketplace (FFM)

An FFM is a marketplace operated by the federal government through the Centers for Medicare & Medicaid Services (CMS). States utilizing an FFM typically do not operate their own health insurance exchange, relying instead on Healthcare.gov. This allows minimal overhead for the state department when reviewing health insurance plans. For insurers, QHP filings in an FFM follow standardized federal guidelines, which include:

Direct review and approval by CMS
Uniform submission requirements
Centralized oversight and compliance monitoring

State-Based Exchange (SBE)

An SBE, on the other hand, is managed entirely by the state itself. States with SBEs maintain greater autonomy over their marketplace, giving them the flexibility to tailor exchanges to better meet local needs. Rather than Healthcare.gov they might have their own portal like Pennie in Pennsylvania. For insurers, QHP filings in an SBE involve:

State-specific submission guidelines and deadlines
Review and approval directly by the state's Department of Insurance or equivalent regulatory body
Increased variability in regulatory compliance requirements

Key Differences in Filing Processes:

Submission and Approval: FFM filings adhere strictly to CMS's centralized system and timelines, whereas SBEs have individualized processes, potentially adding complexity but allowing for local flexibility if states have priorities that may exceed federal guidelines..
Regulatory Environment: FFMs provide a standardized regulatory approach, simplifying multi-state insurer operations. SBEs offer tailored state policies, potentially requiring insurers to adjust their plans state-by-state.

What does this mean for me?

Well I work on filings for both State-Based and Federally-Facilitated plans. When it comes time to file the documents needed to sell a successful insurance plan, someone needs to be there to manage that process and identify the deliverables that the regulator (whether CMS or state) is going to need by the deadline. The majority of states follow the CMS guidelines, but there are many edge-cases to be prepared for.