On March 12, 2012, the Department of Health and Human Services (HHS) released its final rule to establish Affordable Insurance Exchanges under the Affordable Care Act (ACA). The Exchanges, which will become operational by January 1, 2014, are state-based health insurance markets for individuals and small employers that seek to allow consumers to directly compare available private health insurance options on the basis of price, quality, and other factors. The final rule: (1) establishes the minimum federal standards that states must meet if they elect to establish and operate an Exchange, including standards related to individual and employer eligibility for and enrollment in the Exchange and insurance affordability programs; (2) outlines minimum standards health insurance issuers must meet to participate in an Exchange and offer qualified health plans (QHPs); and (3) provides basic standards that employers must meet to participate in the Small Business Health Options Program. According to HHS, the final rule enhances state flexibility for operating Exchanges, including allowing states to decide whether their Exchange should be operated by a non-profit organization or a public agency, whether to participate in a regional Exchange, how to select participating plans, and whether to partner with HHS for certain Exchange functions. The official version will be published on March 27, 2012. Comments are being accepted on specific aspects of the rule for 45 days after publication; such provisions address, among other things, the ability of a state to permit agents and brokers to help qualified individuals apply for advance payments of the premium tax credit and cost-sharing reductions; certain Medicaid and CHIP rules; and various eligibility determination provisions. Note that this rule does not address all ACA Exchange provisions (such as defining essential health benefits, actuarial value, and other benefit design standards, and certain quality standards for Exchanges and QHP issuers); additional details will be provided in forthcoming guidance and future rulemaking.