The Department of Health and Human Services (HHS) has issued a final rule that addresses triggering events and special enrollment periods for qualified employees and their dependents and implements a transitional policy regarding employees’ choice of qualified health plans (QHPs) in the Small Business Health Options Program (SHOP) under the Patient Protection and Affordable Care Act (ACA). The regulations are effective on July 1, 2013. The final rule was published in the June 4 Federal Register.
Background. Beginning in 2014, individuals and small businesses will be able to purchase private health insurance through competitive marketplaces, called Affordable Insurance Exchanges or “Exchanges” (also called Health Insurance Marketplaces). 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 SHOP will assist qualified employers in providing health insurance options for their employees. HHS issued a final rule in March 2012 (Exchange Establishment Rule) that set forth standards for the administration of SHOP Exchanges. HHS issued proposed rules in March 2013, that would amend those standards. This current final rule adopts the proposed rules.
Enrollment periods. The Exchange Establishment Rule established special enrollment periods for Exchanges serving the individual market, and the SHOP regulations adopted most of these provisions by reference. Unless specifically stated otherwise in the regulations, a qualified individual has 60 days from the date of a triggering event to select a QHP. This final rule consists of a provision to amend the duration of certain special enrollment periods to correspond to the duration in group markets under HIPAA.
The final rule provides that a qualified employee or dependent of a qualified employee who has obtained coverage through the SHOP has 30 days from the date of most of the triggering events to select a QHP. Additionally, a qualified employee or dependent of a qualified employee who has lost eligibility for Medicaid or CHIP coverage, or who has become eligible for state premium assistance under a Medicaid or CHIP program, is eligible for a special enrollment period in a SHOP and has 60 days from the date of the triggering event to select a QHP.
The final rule also clarifies that a dependent of a qualified employee is eligible for a special enrollment period only if the employer offers coverage to dependents of qualified employees.
SHOP functions. The final rule provides that for plan years beginning on or after Jan. 1, 2014, and before Jan. 1, 2015, 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. Federally-facilitated SHOPs (FF-SHOPs) will not exercise this option, but will instead allow employers to choose a single QHP from the choices available in FF-SHOP to offer their qualified employees.
With regard to QHPs offered through the SHOP for plan years beginning on or after Jan. 1, 2015, the SHOP must allow a qualified employer to select a level of coverage in which all QHPs within that level are made available to the qualified employees of the employer.
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