11.14.2017
In the recently released proposed rules regarding benefit and payment parameters for 2019, CMS proposed new rules pertaining to the implementation of the Small Business Health Options Program (SHOP) exchanges. Under the proposed rules, which the federally facilitated SHOPs and state-based SHOPs using the federal platform would adopt if finalized, employers would enroll in a SHOP plan directly with an insurance company offering SHOP plans, and could use the assistance of a SHOP registered agent/broker. Employers would still need to obtain a determination of eligibility by going to HealthCare.gov.
As background, on May 15, 2017, CMS announced plans to discontinue use of Healthcare.gov to enroll small employers and employees into the federally facilitated SHOP exchange effective Jan. 1, 2018. This decision was a result of lower than expected agent/broker participation and enrollment numbers. In the past, small employers could only qualify for the Small Business Health Care Tax Credit by applying for coverage and enrolling employees through the SHOP. However, this process has been seen as overly burdensome and difficult for employers, employees, agents/brokers and carriers involved, and is generally blamed for low utilization of the SHOP.
Thus, in an effort to encourage greater agent/broker and carrier participation and increase employee enrollment, CMS proposed these rules, which would alter how small businesses receive the Small Business Health Care Tax Credit. The rules would also change the way small businesses enroll their employees. Beginning in 2018, small groups in states that use the federally facilitated Healthcare.gov will continue to receive a determination of eligibility for the tax credit through Healthcare.gov, but will instead enroll in coverage through an agent/broker or directly with the carrier.
In the meantime, to prevent the SHOP exchanges from continuing to incur operational burdens and to mitigate burdens for issuers, agents/brokers and employers, while CMS considers comments on the proposed rules it will permit SHOP enrollment in accordance with those proposed rules. So, SHOP enrollment can begin in accordance with the proposed rules on the first date on which employers can complete a group enrollment for a plan year that would take effect in 2018 (e.g., for plans with effective dates on or after Jan. 1, 2018). State-based SHOPs and their relevant stakeholders (e.g., issuers and agents/brokers) will have this same flexibility.
Finally, as a reminder, small employers may only enroll through Healthcare.gov until Nov. 15, 2017. Groups that presently have SHOP plans may continue to pay premiums through Healthcare.gov until renewal in 2018.