HHS Amends SHOP Standards In Proposed Rule

The Department of Health and Human Services has issued a proposed rule that would implement provisions of the Patient Protection and Affordable Care Act (ACA) regarding health insurance exchanges and the Small Business Health Option Program (SHOP). Specifically, this proposed rule would amend existing regulations regarding triggering events and special enrollment periods for qualified employees and their dependents and would implement a transitional policy regarding employees’ choice of qualified health plans (QHPs) in the SHOP Exchange. The proposed rule is scheduled to be published in the March 11 Federal Register.

The ACA directs each state that chooses to operate an exchange to also establish a SHOP exchange that provides health insurance options for small businesses. The proposed rule amends some of the standards established in a final rule also issued in the March 11 Federal Register.

Special enrollment periods. Previously, the HHS had established standards for special enrollment periods for individuals enrolled through an exchange or SHOP and provided that, in most instances, a special enrollment period would be 60 days from the date of a triggering event. However, this proposed rule would amend the special enrollment period for the SHOP to 30 days for more applicable triggering events, so that it aligns with the HIPAA-established special enrollment periods for the group market.

To further align the SHOP provisions with HIPAA, the HHS also has proposed that 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. The HHS explained that this triggering event had previously been inadvertently omitted from the regulations because it applies only to group health plans and health insurance coverage in the group market.

Minimum SHOP functions. Previously, the HHS also had set forth the minimum functions of a SHOP, including that the SHOP must allow employers the option to offer employees all QHPs at a level of coverage chosen by the employer, and that the SHOP may allow employers to offer one or more QHPs to qualified employees by other methods. The proposed rule includes a transitional policy for plan years beginning on or after Jan. 1, 2014, and before Jan. 1, 2015. For these plans, a SHOP would not be required to permit qualified employers to offer their qualified employees a choice of QHPs at a single level of coverage but would have the option of doing so. For plan years beginning on or after Jan. 1, 2014, and before Jan. 1, 2015, federally-facilitated SHOPs would not exercise this option, but would instead assist employers in choosing a single QHP to offer their qualified employees.

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 insurance tax credit).

Comments may be submitted electronically through http://www.regulations.gov; or by mail to: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9964-P2, P.O. Box 8016, Baltimore, MD 21244-8016.

Visit our News Library to read more news stories.