On April 18, 2016, the Centers for Medicare & Medicaid Services (CMS) extended a transition policy for state-based Small Business Health Options Program (SHOP) Exchanges that have not been able to implement online enrollment. The extended transition policy allows certain state-based SHOPs to use direct enrollment as a transitional measure for up to an additional two years, for plan years beginning in 2017 and 2018. However, the extension applies only for state-based SHOPs that currently use direct enrollment. As a result, some small employers will continue to be required to enroll their employees in state-based SHOP coverage through direct enrollment, instead of online. Using the direct enrollment process, small employers enroll in qualified health plan (QHP) coverage through an agent or broker or directly with an insurer. Despite this, the ACA’s small business tax credit will continue to be available in all SHOP Exchanges.
Overview of SHOP Exchanges
The Affordable Care Act (ACA) required each state to establish an online competitive marketplace, called an Exchange, where individuals and small businesses may purchase health insurance, beginning in 2014. The SHOP is the Exchange component for small businesses. Online enrollment generally became available in all federally run SHOPs (FF-SHOPs) beginning Nov. 15, 2014. Prior to Nov. 15, 2014, employers had been required to use a process called “direct enrollment” with an agent, broker or insurer to enroll their employees in FF-SHOP coverage for 2014 (similar to how most small employers previously got insurance).
States that operate their own SHOP Exchanges (state-based SHOPs) could still offer online enrollment.
For more information, contact Healthcare Compliance Inc.