CMS sheds light on SHOP transition to full online functionality

A transition to full online functionality will be available to state-based Small Business Health Options Programs (SHOPs), allowing direct enrollment for 2015 and 2016 if certain criteria are met, according to Frequently Asked Questions (FAQs) released by the Centers for Medicare and Medicaid Services (CMS). The FAQs also discuss the use of Section 1311 grants to fund the establishment of SHOP online functionality.

According to the FAQs, the direct enrollment approach should meet three criteria: (1) the employer applies for and receives a favorable eligibility determination from the SHOP before or after enrollment is completed; (2) enrollment is in a SHOP qualified health plan (QHP); and (3) the SHOP QHP issuer conducts enrollment in a manner consistent with all SHOP rules and policies. States that wish to undertake the direct enrollment option must submit a plan including implementation milestones and dates for how they will achieve the automated functionality such that the SHOP complies with CMS functional requirements, such as the ability to file an application and complete enrollment completely online. SHOPs interested in this option are advised to collaborate with CMS and the Department of the Treasury to ensure that small employers who directly enroll will be able to access the Small Business Health Care Tax Credit.

Section 1311 grants. States using existing and approved grant funds received under Section 1311 of the Patient Protection and Affordable Care Act (ACA) may use the funding to establish online functionality if doing so is part of the state’s approved work plan under its current grant awards, or during an approved transition period if funds are still available. States may also request a no-cost extension to use the funds for establishment of SHOP online functionality.

Notification. To claim the Small Business Health Care Tax Credit, otherwise-eligible small businesses must enroll in a SHOP QHP and file an application to participate in the SHOP, receiving a favorable determination of eligibility. When advising small business of eligibility, the SHOP should provide information to the employer about how to file for the tax credit with the IRS.

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