CMS Releases SHOP Program Rule

On May 31, the Centers for Medicare & Medicaid Services (CMS) released a final rule on the Small Business Health Options Program, part of the Affordable Care Act (ACA), as well as simplified application forms for the program. The final rule was published in the Federal Register on June 4.

Under the SHOP program, beginning October 1, small employers in each state will be able to choose from a range of health insurance options for their employees for coverage beginning January 1, 2014. The start of the SHOP program is intended to be synchronized with that of the state healthcare insurance exchanges, or marketplaces, that are also being created under the ACA. Enrollment periods and other aspects of SHOPs are also aligned with special enrollment periods for group insurance under the Health Insurance Portability and Accountability Act of 1996.

For plan years beginning on or after January 1, 2014 and before January 1, 2015, SHOPs in 16 states plus the District of Columbia may choose to offer their employees either one selected qualified health plan (QHP), or a choice of QHPs. In the 33 states in which the federal government will operate Federally-facilitated SHOPs (FF-SHOPs), however, employers will be required to choose a single QHP for their employees from the choices available. This transitional policy will be replaced by an employee choice model beginning in 2015.

CMS also released the final SHOP applications for employers and employees on its website. CMS pointed out that at only three and two pages long, respectively, the online applications are shorter and simpler than most insurance applications.

White House Memorandum Updates Exchange Progress

In a “Memorandum to Interested Parties” dated May 30, the White House reiterated that state health exchanges will be ready to begin accepting applications for enrollment by the statutory deadline of October 1, 2013. In 2014, 16 states plus DC will run their own exchanges; the U.S. Department of Health and Human Services (HHS) will run the exchanges for 19 states; and HHS will work with 15 states to run exchanges in partnership. HHS will release state-specific premium information in September for Federally Facilitated Exchanges, while state-run exchanges may post rates once they have been negotiated and agreed upon. Some states, including California, Oregon and Colorado, have already released information regarding the insurers who will participate in their exchanges, including their proposed premiums.

The Memorandum also stated that the Office of Personnel Management (OPM) will run the “Multi-State Plan Program,” which is “designed to promote additional choices in all States over time.” Multi-State plans will be certified by OPM based on comparable standards and adherence to uniform requirements to ensure comparability.

According to the Memorandum, “about 90% of target enrollees will have five or more [different] insurance company choices,” and most companies will offer multiple plans in each state. More than 120 insurers have applied to offer plans in the HHS-run exchange.