CurrentMedicarePolicy CMS-9964-F2

Establishment of Exchanges and Qualified Health Plans; Small Business Health Options Program (SHOP) — SHOP special enrollment periods and transitional employee choice policy

Final rule amending SHOP regulations to align most SHOP special enrollment periods with HIPAA (30 days), add a 60-day SEP for gain/loss of Medicaid/CHIP or State premium assistance, and delay mandatory employee choice and premium aggregation until plan years beginning on or after January 1, 2015 (FF-SHOPs will not offer employee choice in 2014). Affects SHOP operations, QHP issuers, qualified employers, and employees.

Policy Summary

PayerMedicare

PolicyEstablishment of Exchanges and Qualified Health Plans; Small Business Health Options Program (SHOP) — SHOP special enrollment periods and transitional employee choice policy

Policy CodePolicy CMS-9964-F2

Change TypeFinal ruleregulatory amendments

Effective DateJul 1, 2013

Next Review Date

Key ActionApply the revised SHOP special enrollment periods (30 days for most triggering events; 60 days for gain/loss of Medicaid/CHIP or State premium assistance) and update enrollment systems and communications accordingly; ensure dependents are treated as eligible only when the employer offers dependent coverage.

SourceLink

POLICY UPDATE CHANGES

SHOP special enrollment periods revised so most triggering events have a 30-day enrollment window (aligns with HIPAA); loss or gain of Medicaid/CHIP or eligibility for State premium assistance receives a 60-day special enrollment period.

Transitional policy finalized: SHOPs are not required to implement employee choice and premium aggregation for plan years beginning in 2014; State-based SHOPs may elect to offer them in 2014, but FF-SHOPs will offer only employer choice (single QHP) in 2014.

QHP certification tying (45 CFR 156.200(g)) remains finalized: issuers or issuer groups with >20% small group market share must offer at least one silver and one gold QHP in FF-SHOP as a condition of participation in the federally facilitated individual market Exchange.

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Policy Snapshot and Scope

This final rule (CMS-9964-F2) updates SHOP operations by aligning most SHOP special enrollment periods with the HIPAA group-market standard and by establishing a one-year transitional policy delaying mandatory employee choice and premium aggregation until plan years beginning on or after 2015-01-01. Effective date: 2013-07-01. The rule revises 45 CFR part 155 (including §155.705 and §155.725) and 45 CFR part 156 (including §156.285(b)(2)) to: (1) set a standard 30-day special enrollment period for most triggering events for qualified employees and dependents in the SHOP and (2) specify a 60-day special enrollment period when the triggering event is loss of, or new eligibility for, Medicaid or CHIP or eligibility for State premium assistance. These changes affect SHOPs, qualified employers, QHP issuers, and employees by changing enrollment windows and by deferring the operational requirement for employee choice and mandatory premium aggregation until plan years beginning on or after January 1, 2015.

Under the transitional policy for plan years beginning in 2014, State-based SHOPs may elect to offer employee choice and premium aggregation in 2014 but are not required to do so; Federally-facilitated SHOPs (FF-SHOPs) will not exercise the employee choice option in 2014 and will instead permit employers to select a single QHP to offer to employees. The rule also clarifies SHOP premium aggregation functions and recordkeeping when performed (monthly billing to employers, collection and remittance to QHP issuers, and maintaining accounting records for 10 years), and retains existing employer contribution methodology while specifying that, for FF-SHOPs offering a single QHP in 2014, the employer-selected single QHP serves as the benchmark for contribution calculations.

Key statistics summary

Standard SHOP SEP (most triggering events)30 days

SHOP SEP for Medicaid/CHIP loss or eligibility and State premium assistance60 days

Effective date for mandatory employee choice & premium aggregation2015-01-01

FF-SHOP transitional year (employer single-QHP only)2014

Record retention for premium aggregation books/records10 years

SHOP Special Enrollment and Employee Choice Decision Trees

Special enrollment period determination for SHOP enrollees

Determines enrollment window length based on triggering event for qualified employees/dependents in SHOP.

ANY of the following

If triggering event is loss of other group health plan or insurance coverage, dependent addition via marriage, birth, adoption, or placement for adoption, or other standard HIPAA-like triggering events → special enrollment period = 30 days from event date.
If triggering event is loss of eligibility for Medicaid or CHIP, or newly becomes eligible for State premium assistance under Medicaid or CHIP → special enrollment period = 60 days from event date.
Dependent eligible for special enrollment only if employer offers coverage to dependents of qualified employees.

Employee choice and premium aggregation implementation decision tree (transitional policy)

Referenced Regulations and Citations

Regulatory citations amendedmixed

45 CFR part 155	Exchange establishment standards — amendments to §§155.705 and 155.725 (SHOP functions, employer choice, premium aggregation, enrollment periods)
45 CFR part 156	Health insurance issuer standards — amendment to §156.285(b)(2) to reference SHOP special enrollment periods (§155.725(j))

NOAA regulatory citationmixed

50 CFR part 300

International Fisheries; Pacific bluefin tuna retention limits in the EPO (NMFS final rule effective July 5, 2013–Dec 31, 2013)

Operational Requirements and Billing Rules for SHOPs, Employers, Issuers

Documentation Required

Special enrollment periods — documentation and timing

Employers, SHOP administrators, and issuers must apply the revised SHOP special enrollment periods: 30 days for most triggering events and 60 days when an employee or dependent gains or loses eligibility for Medicaid or CHIP or becomes eligible for State premium assistance. Dependents are eligible for SEP only if the employer offers coverage to dependents. Update enrollment systems and enrollment communications to reflect these windows and timing rules.

Ensure SHOP enrollment systems enforce 30-day and 60-day selection windows per §155.725(j)(3)(i)-(ii).
Revise member and employer communications (notices, materials, web tools) to state the 30/60-day SEP timing and dependent eligibility conditions.
Coordinate with issuers to ensure effective dates and loss-of-coverage determinations follow §§155.420(b) and 155.420(e).

Numeric Thresholds and Operational Limits

Regulatory thresholds and windows

Issuer small group market share threshold20%

Special enrollment window for most triggering events30 days

Special enrollment window for Medicaid/CHIP loss or eligibility (or State premium assistance)60 days

Record retention for premium aggregation10 years

Key Terms

Definitions (deduplicated display; source entries included)

SHOPSmall Business Health Options Program established under section 1311(b) of the Affordable Care Act to assist qualified small employers in providing health insurance options to employees.

Qualified employerA small employer that elects to make all full-time employees eligible for one or more qualified health plans offered in the small group market through an Exchange (per section 1312(f)(2)(A)).

FF-SHOPFederally-Facilitated Small Business Health Options Program operated by the federal government for States that do not operate their own SHOP.

Employee choiceSHOP model where employer selects a metal level of coverage and employees may choose any QHP offered at that level.

Premium aggregationA SHOP function that aggregates premiums when employees of a single employer are enrolled in multiple QHPs so the employer makes a single payment to the SHOP or administrator.

Qualified employee

Policy Changes and Materials

2013-07-01revisedLatest

SHOP special enrollment periods revised to align with HIPAA: most triggering events have a 30-day enrollment window; loss or gain of Medicaid/CHIP eligibility or eligibility for State premium assistance receives a 60-day special enrollment period.

2013-07-01clarified

Effective date for employer/employee choice and premium aggregation deferred: mandatory employee choice and premium aggregation apply to plan years beginning on or after January 1, 2015; State-based SHOPs may elect to offer them before 2015, while Federally-Facilitated SHOPs will offer only employer choice (single QHP) in 2014.

2013-07-01clarified

Policy Summary

PayerMedicare

PolicyEstablishment of Exchanges and Qualified Health Plans; Small Business Health Options Program (SHOP) — SHOP special enrollment periods and transitional employee choice policy

Policy CodePolicy CMS-9964-F2

Change TypeFinal ruleregulatory amendments

Effective DateJul 1, 2013

Next Review Date

SourceLink

On This Page

ALL of the following

For plan years beginning on or after January 1, 2015 → SHOPs must provide employee choice (employers may permit employees to choose any QHP at an employer-selected metal level) and premium aggregation.
For plan years beginning before January 1, 2015 → State-based SHOPs may elect to offer employee choice and premium aggregation but are not required to do so.
For plan years beginning in 2014 in Federally-Facilitated SHOPs (FF-SHOPs) → FF-SHOPs will allow employers to select a single QHP to offer to employees (employer choice only); FF-SHOPs will not exercise option to allow employee choice in 2014.

Eligibility for SHOP special enrollment periods (SEP)

Conditions and timeframes under which qualified employees or their dependents may enroll or change QHPs via SHOP SEPs.

ANY of the following

Event described in §155.420(d)(1),(2),(4),(5),(7),(8), or (9) — qualifies for SEP; enrollee has 30 days from triggering event to select a QHP.
Loss of eligibility for Medicaid (title XIX) or State child health plan (title XXI) — qualifies for SEP; enrollee has 60 days from date of loss to select a QHP.
Becomes eligible for assistance under Medicaid or State child health plan (including waivers/demonstrations) with respect to SHOP coverage — qualifies for SEP; enrollee has 60 days from date of eligibility to select a QHP.

ALL of the following

Dependent of a qualified employee is NOT eligible for special election period if employer does not extend the offer of coverage to dependents.
Effective dates of coverage and determination of loss of minimum essential coverage follow §§155.420(b) and 155.420(e), respectively.

Employer choice and SHOP QHP availability rules

Rules governing how employers must make QHPs available to qualified employees through a SHOP.

ALL of the following

For plan years beginning on or after Jan 1, 2015, SHOP must allow a qualified employer to select a level of coverage (as in section 1302(d)(1)) in which all QHPs within that level are made available to qualified employees.
For plan years beginning on or after Jan 1, 2015, SHOP must allow an employer either to (A) make available all QHPs at the selected level, or (B) make available a single QHP (i.e., SHOP may offer both methods).
For plan years before Jan 1, 2015, SHOP may allow employers to use either method (level-of-coverage or other method); Federally-facilitated SHOP may provide option to make a single QHP available.

SHOP premium aggregation requirements

SHOP responsibilities for premium billing, collection, payment, and recordkeeping when performing premium aggregation.

ALL of the following

SHOP must provide each qualified employer a monthly bill identifying employer contribution, employee contribution, and total amount due to QHP issuers.
SHOP must collect from each employer the total amount due and make payments to QHP issuers for all enrollees.
SHOP must maintain books, records, documents, and other evidence of accounting procedures and practices of the premium aggregation program for each benefit year for at least 10 years.
Effective dates: State-based SHOP may elect to perform premium aggregation for plan years before Jan 1, 2015 but is not required to; Federally-facilitated SHOP will perform premium aggregation only for plan years beginning on or after Jan 1, 2015.

Billing Rule

Monthly employer billing when SHOP performs premium aggregation

When a SHOP performs premium aggregation it must provide each qualified employer a monthly bill showing employer contribution, employee contribution, and the total amount due; collect the total amount due from the employer; and remit payments to QHP issuers for all enrollees. State-based SHOPs may elect to perform these functions before 2015; FF-SHOPs will perform them beginning with plan years on or after January 1, 2015.

Regulatory citations: 45 CFR 155.705(b)(4)(A)-(B)

Documentation Required

Special enrollment period processing timelines

Qualified employees or dependents have 30 days from most triggering events to select a QHP and 60 days when the triggering event is loss of Medicaid/CHIP eligibility or gaining eligibility for Medicaid/CHIP assistance; effective dates and loss-of-minimum-essential-coverage rules follow §§155.420(b) and (e).

See §§155.725(j)(3)(i)-(ii) and §§155.725(j)(5)-(6) for selection windows and effective date/loss of MEC rules.
Referenced triggering events drawn from §155.420(d) as listed in §155.725(j)(2)(i).

Establishment of Exchanges and Qualified Health Plans; Small Business Health Options Program (SHOP) — SHOP special enrollment periods and transitional employee choice policy

Policy Snapshot and Scope

SHOP Special Enrollment and Employee Choice Decision Trees

Referenced Regulations and Citations

Operational Requirements and Billing Rules for SHOPs, Employers, Issuers

Numeric Thresholds and Operational Limits

Key Terms

Cross-References

Policy Changes and Materials