The Centers for Medicare & Medicaid Services (CMS) issued its final rule implementing certain Affordable Care Act provisions related to the Small Business Health Options Program (SHOP). The future health insurance exchanges will operate a SHOP to offer small businesses and their employees certain health insurance options. Businesses with up to 100 employees will be eligible for SHOP participation, although states can limit participation to businesses with up to 50 employees until 2016. The final rule amends current SHOP regulations related to triggering events and special enrollment periods for SHOP participants, and establishes a transitional policy regarding the choice of qualified health plans (QHPs) that will be offered in the SHOPs.
According to the final rule, starting on October 1, 2013, small employers will be able to choose health insurance options through the SHOP for their employees for coverage beginning on January 1, 2014, when the exchanges are slated to begin operation. Qualifying employers may be eligible for a tax credit of up to 50% of the employer’s premium contribution.
The final rule establishes that the special enrollment period for the SHOP will be 30 days for most applicable triggering events, “so that it aligns with the special enrollment periods for the group market established by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).” In addition, “if an employee or dependent becomes eligible for premium assistance under Medicaid or the Children’s Health Insurance Program (CHIP) or loses eligibility for Medicaid or CHIP, this would be a triggering event, and the employee or dependent would have a 60-day special enrollment period to select a QHP” through the SHOP.
As for the transition policy, starting in 2014, “a SHOP will not be required to permit qualified employers to offer their qualified employees a choice of QHPs at a single level of coverage, but will have the option of doing so.” In other words, for 2014, SHOPs can either allow employers to offer their employees a range of health insurance options, or can have employers offer their employees one plan only. If the SHOP is federally-facilitated as opposed to state-facilitated, employers will be allowed to choose one plan from a range of plans to offer their employees in 2014. Beginning in 2015, however, all SHOPs will be required to allow small businesses to let their employees choose coverage from a group of plans. According to the rule,
this transitional policy is intended to provide additional time to prepare for an employee choice model and to increase the stability of the small group market while providing small groups with the benefits of SHOP in 2014 (such as a choice among competing QHPs and access for qualifying small employers to the small business health care tax credit).
The final SHOP applications employers and their employees will use to apply for coverage in the SHOP starting on October 1, 2013 can be found here.