Health Care Reform – HHS issues new proposed rule postponing employee SHOP choice
March 21, 2013
On March 1 the Department of Health and Human Services (HHS) released a new proposed rule that would postpone employee choice (allowing SHOP employers to offer multiple qualified health plan options for employees to choose from) and the premium aggregator in the Small Business Health Options Program (SHOP) until 2015. The premium aggregator is a tool that consolidates billing for employers who have employees enrolled in multiple QHPs.
The proposed rule also revises triggering events and special enrollment periods for qualified employees and their dependents. These changes are intended to help issuers prepare and price qualified health plans (QHPs) for an employee choice environment, and to make the systems and operational changes required for SHOP enrollment and premium aggregation.
Comments are due April 1, 2013.
Why delay employee choice?
The Centers for Medicare and Medicaid Services (CMS) is proposing that employers only be allowed to enroll in one QHP in 2014. In addition, state SHOPs would not have to offer employee choice next year. This policy is intended to provide health plan issuers with additional time to prepare for an employee choice model and to stabilize the small group market in 2014.
Why postpone premium aggregation until 2015?
The premium aggregation function for the SHOP was designed to assist employers whose employees were enrolled in multiple QHPs. Because this function will not be necessary in 2014 for SHOPs that delay implementation of the employee choice model, CMS is also proposing that the premium aggregation function be optional for plan years beginning before January 1, 2015.
What are the special enrollment period proposed changes?
CMS previously established that a special enrollment period is 60 days from the date of the triggering event for the Marketplace and SHOP.
CMS now proposes to amend the special enrollment period for the SHOP to 30 days for most applicable triggering events, so that it aligns with the special enrollment periods for the group market established by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
To further align the SHOP provisions with HIPAA, CMS also proposes that if an employee or dependent becomes eligible for premium assistance under Medicaid or the Children’s Health Insurance Program (CHIP) or loses eligibility for Medicaid or CHIP, this would be a triggering event, and the employee or dependent would have a 60-day special enrollment period to select a QHP. This triggering event had previously been inadvertently omitted from the regulations.
CMS is also proposing to change special enrollment periods to clarify that a dependent of a qualified employee is not eligible for a special election period if the employer does not offer coverage to dependents.
Where can I find more information?
More information will be available following the comment period.
The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.