Employee Choice in SHOP Exchange Delayed
April 12, 2013
Last month we learned that a key feature of the Small Business Health Option (SHOP) Exchange – the ability for a small business to offer multiple plan options starting in 2014 – has been delayed. In regulations issued on March 11, 2013, the Department of Health and Human Services (HHS) provided transitional relief that would permit SHOP exchanges the option of offering only one health insurance plan, delaying implementation of the employee choice model until 2015. The administration cited “operational challenges and needing additional time to prepare for an employee choice model and to increase the stability of the small group market” as reasons for the delay.
HHS has proposed that for 2014, businesses that use the either a state-federal partnership or federally facilitated exchange, including Michigan’s planned federally facilitated exchange, will be able to offer only one health insurance plan to their employees.
The proposed regulation also indicated that in 2014, federally facilitated exchanges would not offer the employee option, but must instead assist employers in choosing only a single Qualified Health Plan (QHP) for employees, which to SBAM sounds a whole lot like the service that you as broker offer your customers today… Further, under the proposed regulations (HHS Reg. Sec. 155.705(b)(3)(iv)(A) and (B)), on or after January 1, 2015, an federally facilitated exchange must provide a qualified employer a choice of two methods to make QHPs available to its employees – either by choosing a level of coverage and making all QHPs offered on the exchange within that level available, or by choosing a single QHP.
Prior to the proposed regulation and the delay, HHS had required that SHOP exchanges allow employers the option to offer employees all QHPs at whatever level of coverage the employer would choose (bronze, silver, gold, or platinum), and that a SHOP could also allow employers to offer one or more QHPs to qualified employees.
The Small Business Association of Michigan (SBAM) will continue to keep you updated as changes occur.