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Exchange State Planning & Establishment Grants Frequently Asked Questions

Application Process

Q: What are Exchange State Planning and Establishment Grants?

A: The Affordable Care Act of 2010 authorizes State Planning and Establishment Grants to help States establish health insurance Exchanges. On July 29, 2010, HHS issued a grant solicitation (also referred to as a Funding Opportunity Announcement, or FOA) publicizing the availability of the first round of funding for these grants - up to $1 million for each State and the District of Columbia. Although State Exchanges are not required to be operating until 2014, work is already underway to conduct the necessary market research and planning. These grants will give States the resources to conduct the research and planning needed to build a better health insurance marketplace and determine how their Exchanges will be operated and governed. States can use these funds for a variety of initial planning activities including, but not limited to:

  • Assessing current information technology (IT) systems and determining any Exchange IT needs;
  • Planning for consumer call centers to answer Exchange questions from their residents;
  • Developing partnerships with community organizations to gain public input into the Exchange planning process.

For more information, including a link to the FOA, go to and search for CFDA 93.525.

Q: When are Exchange planning grant applications due?

A: Grant applications must be filed by September 1, 2010.

Q: How will we know if our application has been received by the Office of Consumer Information and Insurance Oversight staff?

A: The Office of Consumer Information and Insurance Oversight (OCIIO) will confirm that the application has been received as submitted within 24 hours, or the next business day.

Q: How do I download the application? What do I do if I encounter problems with this process?

A: You can access the electronic application for this project on You must search the downloadable application page by the CFDA number 93.525.

On the website, you will find information about submitting an application electronically through the site, including the hours of operation. OCIIO strongly recommends that you do not wait until the application due date to begin the application process through Please see page 6 the FOA for additional information.

Q: 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?

A: 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 OCIIO of the delay and provide the case number.

Q: How do we fill out the mandatory document “Disclosure of Lobbying Activities” if we do not have any lobbying activities to disclose?

A: The Lobbying Form has yellow fields that applicants must complete. If the applicant does not engage in Lobbying activities it can respond to the Section Fields #4, #6, and #11 and respond with an N/A for Section Fields 10a & 10b.

Q: Should the documents that are submitted as attachments to the grant application be in PDF or Word format?

A: and OCIIO 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.

Q: Can you describe the method by which funds will be disbursed to the States if a grant application is approved?

A: Grant funds are disbursed on an ongoing basis to the State upon receipt and approval of a payment request. More detailed instructions for submitting payment requests and the process of approval will be provided in the award letter and the grant terms and conditions.

Q: Who is the point of contact for questions related to these grants?

A: For questions about the grant announcement, please contact:

Michelle Feagins
Office of Consumer Information and Insurance Oversight
Department of Health and Human Services
(301) 492-4312

Q: Is US Mail the only the only way the awardees will be notified of their grant awards?

A: At this time, we plan to utilize only the US Postal Service to notify recipients.

Q: Will HHS provide any guidance or assistance on completing the application process?

A: OCIIO held a pre-application conference call for potential applicants on August 5, 2010. A second call will be held on August 25, 2010 at 2pm ET. The conference calls provide an overview of this project guidance and include an opportunity for States to ask questions. The pre-application call information is available in the FOA.

Application Content

Q: Page 5 of the FOA indicates that the governor must designate a State entity as the grant applicant. What is a “State entity”?

A: States are the only eligible applicants for this grant solicitation, and the term “State” is defined to include the District of Columbia. A State entity is either a State agency, such as the State Medicaid agency or Department of Insurance, or an independent State agency. Non-profits and other nongovernmental corporate entities are not eligible to apply for these grants.

States may choose to subcontract the grant’s planning activities to a non-profit entity, but the State is the party ultimately responsible for compliance with the terms and conditions of the grant. If a State engages one or more subcontractors, it must provide OCIIO with the letter or letters of agreement describing these relationships and each contractor’s scope of work. Please see page 12 of the FOA for information on this requirement.

Q: Pages 10-11 of the FOA list a variety of topics that must be addressed in the project narrative section of the grant application. Each topic description contains a list of items that may be addressed by the applicant. Does OCIIO want subheadings for each of the project narrative items, or does each item need to be in a separate section?

A: OCIIO is not requiring subheadings or separate sections for each of the topics listed in the project narratives. The items included in the project narrative topic descriptions are merely examples designed to illustrate what we are looking for in this section of the application; not every item listed in the topic description must be addressed in the application. Sections and subheadings should be used in a manner that would aid the reader.

Q: Page 14 of the FOA indicates that consumers and other stakeholders must have meaningful involvement in the planning, implementation, and evaluation of the project. The timeline for this grant may make it difficult to engage stakeholders. How does a State address that in its grant application?

A: You must describe how you will engage stakeholders in your application. We believe the activities funded by Exchange planning and establishment grants will occur over a significant period of time that is sufficient to ensure an opportunity for stakeholders to have meaningful input.

Q: Page 14 of the FOA indicates that all grant budgets must include some funding to facilitate participation on the part of individuals who have a disability or long-term illness and their families. What sorts of accommodations have traditionally been made to facilitate their participation?

A: This section, Administrative and National Policy Requirements, notes that, if under this grant a State conducts any consultations with stakeholders, it must ensure that it facilitates the participation of individuals with disabilities. You do not need to itemize these costs specifically, but States should ensure that they budget for these types of costs.

Q: Attachment A on page 17 of the FOA identifies some prohibited uses of Exchange grant funds. Must this attachment be submitted with the grant application?

A: No, this section is an attachment to the announcement, not a required attachment to the grant application.

Q: As part of the application, the State is required to submit a Project Site Location Form. Is this form only for States that use a subcontractor for the grant activities?

A: No. This is a required form from OMB. The State must designate the location of the applicant state entity. If a State is contracting any grant activities out to another entity, the Project Site Location Form should nevertheless specify the State applicant’s address.

Q: As part of the application, the State must submit a work plan and timeline. Is the timeline related only to planning activities or is it a timeline for actually implementing the Exchange?

A: Grant applicants must submit a timeline for the project goals and objectives related to this grant period, which begins September 30, 2010 and ends on September 30, 2011.

Q: Some States already operate an Exchange. May these States qualify for Exchange planning and establishment grants?

A: Yes. States that already have an Exchange may use Exchange grants to fund activities related to planning and implementing changes necessary to bring the existing Exchange into compliance with the Exchange requirements set forth in the ACA.

Q: Can you provide additional information about the Federal requirements outlined in the finance section of the Project Narrative requirements?

A: The Project Narrative should address how the State will ensure the financial integrity of the Exchange that it is planning to implement. With respect to the financial integrity of the Exchange, States should plan for how their Exchanges will meet the requirements set forth in Section 1313 of ACA. States should plan for how they will use funds and track expenditures. We refer you to requirements in Section 1313 of ACA including annual audits of Exchanges and requirements on preventing fraud and abuse. We want your planning process to include planning for how you will meet these requirements.

Q: If some States do not submit proposals for Exchange planning grants, could States that need more funding for Exchange planning activities submit a larger budget?

A: No. Each State may receive up to $1 million as a result of this grant solicitation. We have yet to determine an amount for next spring’s solicitation, and we will work with the States so they can apply for additional funding at that time.

Q: If a State does not have an approved agreement for indirect costs, may it use an estimated rate and then submit a Change in Scope later on?

A: A State must establish an indirect cost rate within the appropriate office or agency before it includes an indirect cost rate in the proposal. If a State does not have a rate by the time it needs to submit its proposal, it can later request a change to its grant proposal.

Use of Funds

Q: Is it permissible to use the grant funds for State travel costs to Federally-sponsored meetings related to the grants?

A: 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.

Q: This grant only covers prospective costs. 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 money, can the State charge to future grants the costs it is incurring now?

A: This grant does not cover pre-application costs; we will consider this option for the next round of grants.

Q: If a State is using existing staff to work in new positions on Exchange planning activities, can it use grant funds to pay for the existing staff?

A: Yes. Grant funds may be used to pay compensation to existing staff for that portion of their time spend working on planning and other activities related to the establishment of an Exchange, regardless of whether the staff was previously assigned to other duties or another position. It is acceptable that the staff for the Exchange activities is obtained through other offices. Grant funds may not be used to fund positions for personnel who will not be working on planning and other activities related to the establishment of an Exchange.

Q: Additional grants are authorized under Section 1561 of the ACA to develop or adapt technology systems to implement interoperable and secure standards and protocols that will facilitate enrollment of individuals in Federal and State health and human services programs. Are these grants available yet, and how do they relate to Exchange planning and establishment grants?

A: The grants authorized under Section 1561 of the ACA are not yet funded. Any information technology systems costs related to the planning and establishment of Exchanges, including costs incurred to establish necessary systems changes to accommodate Exchange eligibility and enrollment functions, may be funded using the Exchange planning and establishment grants. However, you will need to ensure that you do not use Exchange planning and establishment grant funds for any activities outside of the Exchange, for example, on information technology systems changes related solely to Medicaid or CHIP eligibility.

Q: Can these grant funds be used for planning and establishing regional Exchanges?

A: Yes. A State should indicate in its grant application that it plans to use the funds for regional planning.

Q: Can a State use Exchange planning and establishment grant funds to conduct analysis and modeling to determine whether it wants to establish an Exchange?

A: Yes.

Q: May these grant funds be used primarily to hire personnel?

A: These grant funds must be used for activities related to planning and 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.

Q: Where will funding come from for Exchange IT functions?

A: The funding for Exchange IT functions should come from the Exchange Planning and Establishment Grants. Funds from this grant solicitation can be used to plan how an IT system will interface with Medicaid, for example. Moving forward with additional grant solicitations of funding, these grants could be used to fund the system changes for the Exchange side of operations. Only Medicaid funds should be used to fund Medicaid-specific systems changes.

Q: When can States draw down the Exchange planning and establishment grant funds?

A: The grant cycle starts on September 30, 2010 and ends after one year. States have 12 months to draw down funding from this grant cycle.

Q: May a State spend grant funds from this grant cycle after September 30, 2011?

A: No, this is a 12-month grant cycle, and States must expend the grant funds no later than September 30, 2011. If, however, a State wants a no-cost extension, it can seek prior approval from OCIIO for the extension.

Q: Page 5 of the FOA indicates that applicants may use the funds from the Exchange grants to complement the consumer assistance grants, is there a limit of scope?

A: Exchange grant funds must be used exclusively for activities related to planning and establishing an Exchange. States can use Exchange grant funds to conduct activities that can be funded under consumer assistance grants and only to the extent that there will be no duplicative Federal funding for such activities and that the activities funded meet the objectives for all of grant solicitations. All such activities must be clearly outlined in the budget narrative.

Q: Page 5 of the FOA mentions tracking Federal dollars. Apart from grant dollars, what would you be envisioning that the States track?

A: If a State chooses to use other funding sources in addition to these grants, the State must ensure that it is appropriately tracking the Federal dollars under this grant. The State must be able to clearly delineate these grant funds from other sources.


Q: 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?

A: If a State cannot name specific subcontractors, it should indicate this in the proposal and identify the tasks a subcontractor may perform.

Q: Can a State contract out a majority of the work associated with the grant?

A: Yes. The State remains responsible for ensuring that all subcontractors comply with the terms and conditions of the grant.

Q: Does a State entity need to submit letters of agreement if it plans to consult with other agencies within the State?

A: The requirement to submit letters of agreement applies when a State will subcontract with another party (private or governmental) for the performance of grant-related activities. The determination to subcontract among state agencies is left to the discretion of the State.

Post-Award Activities

Q: May a State amend its grant proposal to reflect the priorities of a newly elected legislature and/or Governor?

A: A 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 OCIIO.

A request for approval of the Change of Scope must be submitted to the Program Official. Only after the Change of Scope is approved by OCIIO and the grantee receives a written response, can the grantee alter the award.

Q: May a State change the principal investigator on the grant?

A: A change of principal investigator is a substantive change; a State will have to seek prior approval from OCIIO before instituting any such change.

Q: After the States have been awarded funding and conduct their Exchange planning activities, does OCIIO have plans to share best practices?

A: We anticipate convening States for this purpose, and will announce such plans when they are finalized.