The Patient Protection and Affordable Care Act—often just called the Affordable Care Act or ACA—passed into law in March 2010 provided seed money to fund health insurance cooperatives in all 50 states. Section 1322 of the ACA requires that a health cooperative, known as a “Consumer Operated and Oriented Plan” (CO-OP) is formed as a non-profit, controlled by and operated on behalf of its members.
A CO-OP is a new type of non-profit health insurer that is directed by its customers, uses profits for customers’ benefit, and is designed to offer individuals and small businesses affordable, customer-friendly, and high-quality health insurance options. CO-OPs may operate locally, statewide, or in multiple states. CO-OPs must be licensed as issuers in each state in which they operate and are subject to state laws and regulations that apply to all similarly-situated issuers.