Consumer Operated and Oriented Plans (CO-OPs)

The Affordable Care Act creates a new type of non-profit health insurer, called a Consumer Operated and Oriented Plan (CO-OP). These insurers are run by their customers. CO-OPs are meant to offer consumer-friendly, affordable health insurance options to individuals and small businesses.

The federal government is offering loans to non-profit organizations to help establish CO-OPs.

What This Means for You

By January 1, 2014, you may have the opportunity to buy health insurance coverage from a CO-OP for yourself or your family. If you’re a small business owner, you may be able to buy health coverage for your employees from a CO-OP.

In a CO-OP, your health insurance needs and concerns are a top priority because you and your fellow CO-OP customer/members elect the board of directors. A majority of these directors must themselves be CO-OP customers. CO-OPs must use profits to lower premiums, improve benefits, or improve the quality of members’ health care.

As an individual or small business owner, you may be able to join others in creating a CO-OP and apply for a federal loan to help get it started. 

Some Important Details

• By January 1, 2014, you may be able to buy a CO-OP health plan through a new competitive health care marketplace in your state, called an Affordable Insurance Exchange. You may also be able to buy a CO-OP health plan outside of an Exchange.
• CO-OPs are required to meet the same state and federal quality and financial standards as other health insurance plans.
• The health care law encourages CO-OP plans to offer better coordination of consumers’ medical care.

For More Information

• Read the regulation at Regulations.gov.
• Find detailed technical and regulatory information on CO-OPs.
• Read the Report of the Federal Advisory Board on the Consumer Operated and Oriented Plan Program (PDF – 1.8 MB).
• Read the Funding Opportunity Announcement that explains the loan program.
• Fact Sheet: CO-OP Health Plans: More Competition, New Choices for Consumers and Small Business
• Use our interactive FAQ tool to find answers to insurance coverage-related questions or ask your own at answers.healthcare.gov.

Posted on: September 23, 2011

Last updated: February 21, 2012