Proposed amendments to SHOP special enrollment periods and employee choice transitional policy
Proposed HHS/CMS rule amending SHOP regulations to shorten most SHOP special enrollment periods to align with HIPAA, add Medicaid/CHIP eligibility changes as a 60-day triggering event, and delay mandatory employee choice and premium aggregation until plan years beginning on or after 2015, affecting SHOP operation for employers, employees, and issuers.
Policy Summary
PayerMedicare
PolicySHOP special enrollment periods and employee choice transitional policy (proposed rule)
Policy CodePolicy N/A
Change TypeProposed amendments with material changes
Effective Date
Next Review Date
Key ActionQualified employees and dependents must select a QHP within shortened SHOP special enrollment periods (generally 30 days; 60 days for Medicaid/CHIP eligibility or loss).
Most SHOP special enrollment periods would be shortened from 60 days to 30 days to align with HIPAA group-market timing.
Becoming eligible for or losing eligibility for Medicaid or CHIP (including state premium assistance) is added as a SHOP triggering event with a 60-day special enrollment period.
Effective date for employer employee-choice requirements and premium aggregation delayed to plan years beginning on or after January 1, 2015.
Defines employer choice requirements for SHOPs effective for plan years beginning on or after January 1, 2015, and provides transitional options for earlier years.
Requires SHOPs to perform premium aggregation functions (billing, collection, payments, and recordkeeping) with specified effective dates.
Adds SHOP special enrollment period rules, including triggering events, timeframes to select QHPs, and dependent eligibility constraints.
Policy Summary
PayerMedicare
PolicySHOP special enrollment periods and employee choice transitional policy (proposed rule)
Policy CodePolicy N/A
Change TypeProposed amendments with material changes
Effective Date
Next Review Date
Key ActionQualified employees and dependents must select a QHP within shortened SHOP special enrollment periods (generally 30 days; 60 days for Medicaid/CHIP eligibility or loss).
30 daysproposed special enrollment period for most SHOP triggering events
60 daysMedicaid/CHIP special enrollment period in SHOP
2014transitional FF-SHOP employer assistance year
2015-01-01effective date for mandatory employee choice
10 yearspremium aggregation records retention
SHOP Coverage & Enrollment Criteria
SHOP enrollment and employer choice criteria
Covered when the following SHOP enrollment and employer offering rules apply:
Most SHOP special enrollment triggering events -> 30-day period to select a QHP.
Aligns SHOP SEPs with HIPAA group-market timing as proposed.
If an employee or dependent becomes eligible for or loses eligibility for Medicaid or CHIP or becomes eligible for state premium assistance -> 60-day special enrollment period in SHOP.
Dependents are eligible for special enrollment only if the employer offers dependent coverage.
For plan years beginning in 2014 (transitional): Federally-facilitated SHOPs will assist employers by offering only a single QHP; State-based SHOPs may choose to allow employee choice or offer a single QHP.
Mandatory employer option to offer employee choice at a single metal level and premium aggregation requirements take effect for plan years beginning on or after January 1, 2015; State-based SHOPs may implement earlier if they elect to do so.
SHOP coverage and enrollment criteria
SHOP operational and enrollment criteria established in the proposed amendments:
For plan years beginning on or after January 1, 2015, SHOP must allow a qualified employer to select a level of coverage (per section 1302(d)(1)), making all QHPs within that level available to qualified employees.
For plan years beginning before January 1, 2015, a SHOP may allow a qualified employer to make one or more QHPs available either by selecting a level of coverage or by another method; however, a Federally-facilitated SHOP will only provide the choice to make available a single QHP in those years.
Premium aggregation requirements: the SHOP must provide each qualified employer with a monthly bill identifying employer and employee contributions, collect the total amount due, remit payments to QHP issuers, and retain accounting records for each benefit year for at least 10 years.
Effective dates for premium aggregation: State-based SHOPs may elect to perform premium aggregation functions for plan years beginning before January 1, 2015; Federally-facilitated SHOPs will perform these functions only for plan years beginning on or after January 1, 2015.
Regulatory Citations, Codes, and Administrative Thresholds
Not applicablemixed
No explicit CPT/HCPCS/ICD-10 or other codes referenced in this portion of the proposed rule.
Not applicable (source)mixed
N/A
This section of the proposed rule does not reference billing or clinical codes; it describes SHOP special enrollment period timing and related provisions.
Regulatory citationsmixed
45 CFR 155.705
Functions of a SHOP, employer choice, and premium aggregation requirements
45 CFR 155.725
Enrollment periods under SHOP, including special enrollment provisions
45 CFR 156.285
Additional standards specific to SHOP, including special enrollment
inv-05: Economic significance threshold for RIA
RIA economic-significance determinationHHS determined the proposed rule does not meet the $100 million per year threshold for a 'major rule' and therefore a full RIA for economically significant rules is not required.
BasisAssessment performed under Executive Orders 12866 and 13563 requiring agencies to evaluate costs and benefits and prepare an RIA for major rules.
Scope of analysisChange limited to SHOP special enrollment period durations and addition of a Medicaid/CHIP triggering event; HHS concluded these actions do not impose new costs on issuers, employers, enrollees, or SHOPs.
inv-06: Record retention
Minimum retention periodMaintain premium aggregation books, records, documents, and other evidence of accounting procedures and practices for each benefit year for at least 10 years.
Employer and SHOP Operational Actions
Note
Employer choice requirements
Employer choice requirements: For plan years beginning on or after January 1, 2015, the SHOP must allow a qualified employer to select a level of coverage (as described in ACA section 1302(d)(1)) in which all QHPs within that level are made available to the qualified employees of the employer. For plan years before January 1, 2015, a SHOP may allow an employer to make one or more QHPs available by either the level-of-coverage method or another method; a Federally-facilitated SHOP prior to 2015 will provide only a single-QHP option. For plan years on or after January 1, 2015, a Federally-facilitated SHOP will offer employers two methods: (A) choose a level of coverage (making all QHPs at that level available), or (B) choose a single QHP.
Plan years beginning on or after 2015: employer may require all QHPs within selected level be offered to employees.
Federally-facilitated SHOP (pre-2015): single QHP only.
Federally-facilitated SHOP (on/after 2015): employer may choose level-of-coverage or a single QHP.
Billing Rule
Premium aggregation
Key Terms
inv-10: SHOP
DefinitionSHOP (Small Business Health Options Program) — a marketplace established under section 1311(b) of the Affordable Care Act to assist eligible small businesses in providing health insurance options to employees.
PurposeDesigned to assist qualified small employers in offering QHPs to employees through Exchanges that operate a SHOP.
Regulatory basisSHOP standards and special enrollment period provisions are implemented at 45 CFR part 155, subpart H and referenced to §155.725 and §155.420.
inv-11: QHP
DefinitionQHP (Qualified Health Plan) — a health plan that meets the standards to be offered through an Exchange or SHOP, as established under the Affordable Care Act and implementing regulations.
Offerings
SHOP special enrollment periods: SHOP must provide SEPs consistent with §155.420; qualifying events in §155.420(d) trigger a 30-day selection window for specified events and a 60-day window for loss of or new eligibility for Medicaid/CHIP or state premium assistance; dependents eligible only if employer extends dependent coverage.
Record scopeRecords relate to premium aggregation program functions including billing, collection, and payments to QHP issuers.
Applicability by SHOP typeState-based SHOPs may elect to perform premium aggregation earlier; Federally-facilitated SHOPs perform aggregation for plan years beginning on or after January 1, 2015.
Premium aggregation: The SHOP must perform premium payment administration functions consistent with applicable effective dates. The SHOP must: (A) provide each qualified employer with a monthly bill identifying the employer contribution, the employee contribution, and the total amount due to QHP issuers; (B) collect the total amount due from the employer and make payments to QHP issuers for all enrollees; and (C) 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. A State-based SHOP may elect to perform these functions for plan years beginning before January 1, 2015, but is not required to do so. A Federally-facilitated SHOP will perform these functions only in plan years beginning on or after January 1, 2015.
Monthly bill must separately identify employer and employee contributions and total due to issuers.
SHOP collects employer payment and remits to QHP issuers for all enrollees.
Maintain premium aggregation accounting records for at least 10 years.
State-based SHOPs may opt in prior to 2015; Federally-facilitated SHOPs required on/after 2015.
Note
Special enrollment periods
Special enrollment periods: The SHOP must provide special enrollment periods consistent with §155.725(j). A qualified employee or a dependent of a qualified employee is eligible for a SHOP special enrollment period if they experience certain qualifying events identified in §155.420(d)(1),(2),(4),(5),(7),(8),(9), if they lose eligibility for Medicaid (title XIX) or CHIP (title XXI), or if they become eligible for assistance under such programs. A qualifying event under §155.725(j)(2)(i) gives the employee/dependent 30 days from the triggering event to select a QHP through the SHOP; loss of Medicaid/CHIP eligibility or new eligibility for assistance under those programs gives 60 days to select a QHP. A dependent is not eligible for a special enrollment period if the employer does not offer coverage to dependents. Effective dates of coverage follow §155.420(b); loss of minimum essential coverage is determined under §155.420(e).
30-day SEP for triggering events listed in §155.420(d)(1),(2),(4),(5),(7),(8),(9).
60-day SEP for loss of Medicaid/CHIP eligibility or new eligibility for Medicaid/CHIP assistance.
Dependent SEP eligibility contingent on employer offering dependent coverage.
Coverage effective dates per §155.420(b); loss of MEC per §155.420(e).
QHPs are the products made available to qualified employees through SHOPs at employer-selected levels of coverage or as single QHP offerings in transitional periods.
Regulatory referencesQHP standards and SHOP interactions are addressed in the Exchange Establishment Rule and implemented in 45 CFR part 155 and related sections such as §156.285.
inv-12: Qualified employer (SHOP context)
Qualified employer (basic)A small employer that elects to make all full-time employees eligible for one or more QHPs offered in the small group market through an Exchange, as defined under section 1312(f)(2)(A) of the Affordable Care Act.
Employer actions pre-2015For plan years beginning before January 1, 2015, a SHOP may allow a qualified employer to make one or more QHPs available using either the level-of-coverage method or another method; Federally-facilitated SHOPs will provide only a single-QHP option in those years.
Employer actions 2015 and afterFor plan years beginning on or after January 1, 2015, a SHOP must allow a qualified employer to select a level of coverage that makes all QHPs within that level available to qualified employees.
inv-13: Level of coverage
DefinitionLevel of coverage — the grouping of QHPs by metal level as described in section 1302(d)(1) of the Affordable Care Act (e.g., bronze, silver, gold, platinum), used for employer selection in the SHOP context.
Employer selection ruleFor plan years beginning on or after January 1, 2015, a qualified employer may select a level of coverage making all QHPs within that level available to qualified employees.
Transitional flexibilityFor plan years before 2015, SHOPs may allow other methods; Federally-facilitated SHOPs in those years provide only a single-QHP option to employers.