Minnesota has received a $26 million federal grant to put toward the development of a health insurance exchange.

Health insurance exchanges-mandated by the 2010 federal health reform law-are marketplaces where consumers and employers can compare health care coverage and choose the option that best meets their needs. Exchanges are expected to lower costs, and they aim to ease the process of shopping for health insurance while also guaranteeing a basic level of coverage.

The funding was provided by the U.S. Department of Health and Human Services and will be administered by the Minnesota Department of Commerce. Minnesota is one of 10 states to receive a portion of $229 million in awards that were announced Wednesday.

The grant comes at a time when an important deadline is looming. By January 1, 2013, each state must demonstrate that its own health insurance exchange will work; if a state fails to prove that it will be able to operate an exchange, the federal government will impose its own version. All exchanges must be available to consumers by January 1, 2014.

“This grant provides the resources to continue the design and planning for technical infrastructure, program integration, operations, and outreach for a Minnesota-made exchange,” Commerce Commissioner Mike Rothman said in a statement. “It will further support ongoing work with all stakeholders to design an exchange that meets the unique demands of Minnesota's consumers, businesses, and health care marketplace.”

Minnesota has been awarded two previous grants from the federal government for the creation of its health insurance exchange. It received a $1 million planning grant in February 2011 and another $4.2 million grant last August.

According to the Commerce Department, it has engaged with various stakeholders-including consumers, employers, insurers, health care providers, and legislators-since last year to discuss the analytical, operational, and technical infrastructure for an exchange. The just-announced grant provides resources to continue that work.