This article was written by Susan Grassli , J.D., GBS Benefits
On November 27, 2013, HHS announced that online enrollment in the federal SHOP Exchange would not be available until November 2014. Small employers who wish to enroll their employees in federal SHOP coverage now — for 2014 — may still do so through “direct enrollment” on their own or through an agent, broker or insurer offering a certified SHOP plan. Additionally, small employers may enroll by completing a paper application and sending it via “snail-mail” or by calling the toll-free federal SHOP Employer Call Center at 800-706-7893 (9 am -7 pm EST).
The delay of online enrollment for small employers and the “direct enrollment” process applies only in states with federally-facilitated SHOPS s (FF-SHOPs). It does not affect employers in states that operate their own SHOP Exchanges. For example, states such as California and Utah that operate state-based SHOP Exchanges will continue to offer online enrollment.
HHS also released a set of Frequently Asked Questions (FAQs) on how the FF-SHOP Exchange would function until November 2014.
Overview of Federal and State SHOP Eligibility and Enrollment Dates
Small employers with up to 50 employees will be eligible to participate in the SHOP Exchanges in 2014 and 2015. In 2016, the maximum number of employees will increase to 100. Beginning in 2017, states may allow businesses with more than 100 employees to participate.
Unlike the individual Exchange enrollment process, small employers can enroll through the SHOP on a monthly basis throughout the year. As such, some states are phasing in SHOP application and enrollment periods.
The individual and SHOP exchanges (both federal and state) opened October 1, 2013, although the federal exchange website has been plagued with major technical problems. State-based exchange websites have generally performed much better, although some have had their share of problems as well. Originally, employers and individuals were required to enroll by Dec. 15, 2013, for coverage to begin on Jan. 1, 2014. HHS recently extended the deadline to December 23, 2013, for coverage effective January 1, 2014, in both the individual and SHOP federal exchange.
Additional Details on Federal SHOP Enrollment: Eligibility Determinations
The FF-SHOP will review each application and determine whether the small employer and its employees are eligible for SHOP coverage. In 2014, the purpose for the SHOP eligibility determination is to allow an employer to claim the expanded the Small Business Health Care Tax Credit, since this is only available for coverage purchased through a SHOP Exchange. The employer also must meet all the other requirements for the tax credit. The amount of the tax credit (as of January 1, 2014) will be up to 50 percent of the employer’s premium contributions.
An employer can offer coverage through a qualified health plan (QHP) in the SHOP Exchange even before the Exchange makes an eligibility determination. Even if the SHOP later determines that an employer is not eligible to enroll through the SHOP, the employer and its employees may remain enrolled in the plan; however, the employer will not qualify for the tax credit.
If an employer does not believe it will qualify for the tax credit, the employer does not need to apply for SHOP eligibility. Additionally, an employer does not need to apply for a tax credit eligibility determination immediately upon enrolling in coverage, as long as the determination is made before tax filing time.
Previous FF-SHOP Feature Delays
On March 27, 2012, HHS issued a final rule that describes the minimum functions of a federal SHOP. The final rule provides that a SHOP must allow employers the option to offer employees all QHPs at a level of coverage chosen by the employer—bronze, silver, gold or platinum. This is called the “employee choice model.” Under the employee choice model, the employer chooses a level of coverage and a contribution amount and employees can select any QHP at that level.
In March 2013, however, HHS announced that FF-SHOPs would not be offering the employee choice feature during 2014. Instead, for 2014 plan years, employers must choose a single QHP to offer their qualified employees. In state SHOPs, the employee choice feature is optional, but not required, for 2014 plan years. This transition policy is intended to provide all SHOPs with additional time to prepare for the employee choice model. (The California SHOP exchange does offer the “employee choice” model.)
The 2012 final rule also included a premium aggregation function for the SHOP that is designed to assist employers whose employees are enrolled in multiple QHPs. Because this function will not be necessary in 2014 for SHOPs that delay implementation of the employee choice model, the final rule makes the premium aggregation function optional for state SHOPs for plan years beginning before Jan. 1, 2015. The FF-SHOP will perform the premium aggregation function only in plan years beginning on or after Jan. 1, 2015.