HHS Finalizes Tying Provisions For Issuers With Substantial Share Of Small Group Market

 

The Department of Health and Human Services (HHS) has finalized Qualified Health Plan (QHP) certification requirements linking participation in Federally-facilitated individual exchanges and Small Business Health Options Programs (SHOPs). The participation, or tying, provision applies for issuers (or members of the same issuer group as an issuer) that have a share of the small group market in a Federally-facilitated SHOP that exceeds 20%.

QHPs required. More specifically, in states with Federally-facilitated exchanges, health insurance issuers with more than a 20% share in the small group market must offer at least one silver-level QHP and one gold-level QHP through their Federally-facilitated SHOP as a condition of their participation in the individual Marketplace. In addition, if issuers have less than a 20% market share in a state’s small group market, but are members of an issuer group with at least one member with a greater than 20% market share, they will have to offer at least one silver-level QHP and one gold-level QHP through the SHOP, if they are to participate in the individual Marketplace. An issuer group is defined at HHS Reg. §156.20 as a group under common ownership and control, or using a common national service mark.

Issuers that are members of an issuer group with at least one member with a greater than 20% market share, but that do not themselves offer small group market products in the issuer group’s state, would not have to offer the above required SHOP coverage themselves. Instead, another issuer in that issuer’s group would do so, and that would have to be an issuer whose small group market share exceeds 20%. The above is based on the HHS’s interpretation of HHS Reg. §156.200(g)(1) and (2), and it applies to the 2016 plan year. For future years, the HHS will evaluate the impact the certification requirements are having on states’ small group markets, especially since they are designed to ensure that employers have a robust choice of QHPs in the SHOPs.

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