Ten more states have submitted their plans to operate a state-based insurance exchange in 2014, HHS Secretary Kathleen Sebelius announced Monday, days after an extended deadline for states to apply for that calendar year.

That brings the tally to 18 states and Washington, D.C., of states that intend to operate their own exchanges in 2014, the inaugural year for these health insurance marketplaces. States have until mid-February to indicate if they want to operate an exchange in partnership with the federal government.

HHS received blueprint applications from California, Hawaii, Idaho, Minnesota, Mississippi, Nevada, New Mexico, Rhode Island, Vermont and Utah by last Friday's midnight deadline. Last week, HHS announced that it had granted eight states—Colorado, Connecticut, Kentucky, Massachusetts, Maryland, New York Oregon and Washington—as well as Washington, D.C., conditional approval of the plans those states had submitted to run their exchanges.

Now HHS has three top priorities, starting with developing final rules for a host of recently proposed regulations that affect the exchanges, said Joel Ario, previously the director of the office of health insurance exchanges at HHS and now the managing director of Manatt Health Solutions in New York. Ario also said HHS needs to make headway on establishing the federally operated exchange in time for the open enrollment period that begins next October. “It's more of an IT challenge,” Ario said, “but they seem to be making good progress.” And HHS must continue to work with the states that will run their own exchanges.

Meanwhile, Joel Michaels, a partner at McDermott, Will and Emery in Washington, said the insurance industry is analyzing the proposed regulations and notices on essential health benefits, market insurance rules and the payment parameters during the current public comment period. Michaels said final regulations are expected in late February or in March.

“During this first year or so, I would hope that there would be some leeway from a federal enforcement perspective because there are so many moving parts to all of this happening so quickly,” Michaels said. “There will be a need to have some flexibility, particularly in the first year.”

Both Ario and Michaels said about a half a dozen states indicated they will opt for a partnership exchange with the federal government. “But I don't know if that will hold,” Michaels said.