CMS Updates FAQs On Composite Rates In Federally-Facilitated SHOP

The Centers for Medicare and Medicaid Services (CMS) has updated its frequently asked questions (FAQs) on the federally-facilitated Small Business Health Options Program (FF-SHOP). The updated FAQs provide additional information on composite rates, expanding on the FAQs issued on Oct. 2, 2013.

The previous FAQs explained that composite premiums will be available in all FF-SHOPs at an employer’s request or as may be required by applicable state law. Under this approach, a total premium is calculated by adding up the per-member premiums for each employee enrolling in coverage. The total amount is then divided by the number of employees to produce a uniform premium rate.

Utilization of composite rates. The updated FAQs state that CMS will ask FF-SHOP issuers to determine if they will use 12-month composite rates for employees for plan years beginning in 2014. The CMS will then communicate to employers which qualified health plan (QHP) issuers are utilizing composite rates in a PDF document available during the employer shopping experience and via the SHOP Employer Call Center.

For employers requesting composite rates, the CMS states that it is working to update the Group XML enrollment transaction to include both a composite rate indicator and the associated 12-month premium amount.

The FAQs also state that the 12-month composite rate established at the time of initial enrollment will appear online when a new employee is added to the roster. Issuers will be responsible for adjusting premiums on employer invoices based on per-member rates and be available to communicate these differences to employer asking about the discrepancy they see in their Employer MyAccount and what appears on the issuer-generated invoice.

Issuers not using composite rates. Until Group XML enrollment transactions can be updated to include composite rate amounts, CMS will transmit composite rates on 834 enrollment transactions. In addition, the 12-month composite rates will appear in the Employer’s MyAccount.

Issuers not using composite rates will be responsible for adjusting premiums on employer invoices based on per-member rates and be available to communicate differences to employers (when they call issuer payment call centers) based on what appears on the issuer’s invoice and what appears in an Employer’s MyAccount. Issuers should be able to recreate a per-member amount based on the date of birth of each enrollee transmitted on the 834 enrollment transaction and the primary business address of the employer that is transmitted on the Group XML file.

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