The U.S. Department of Health and Human Services (HHS) has issued proposed rules outlining the basic standards employers must meet to voluntarily participate in a SHOP (Small Business Health Options Program). The Affordable Care Act directs each state that operates an Affordable Insurance Exchange, a state-based competitive marketplace where individuals and small businesses will be able to purchase private health insurance beginning in 2014, to provide for the establishment of a SHOP to assist qualified employers and facilitate the enrollment of certain employees into qualified health plans.
Employers Eligible to Participate in a SHOP (Small Business Health Options Program)
The proposed rules provide that an employer is a qualified employer eligible to purchase coverage through a SHOP if such employer:
- Is a small employer (no more than 100 employees);
- Elects to offer, at a minimum, all full-time employees coverage in a qualified health plan through a SHOP; and
- Has its principal business address in the Exchange service area and offers coverage to all its employees through that SHOP; or
- Offers coverage to each eligible employee through the SHOP serving that employee's primary worksite.
A qualified employer may continue to participate in a SHOP if it ceases to be a small employer due to an increase in the number of employees, until the employer either fails to meet the other eligibility criteria or elects to no longer participate in the SHOP.
Standards for Employer Participation in a SHOP (Small Business Health Options Program)
Under the proposed rules, the following standards apply for small employer participation in a SHOP:
- Each SHOP will set a uniform process and timeline for each employer seeking to become a qualified employer through the SHOP.
- A qualified employer may make coverage in a qualified health plan available to employees through the SHOP according to the procedures established.
- A qualified employer participating in a SHOP must provide certain information to its employees about the methods for selecting and enrolling in a qualified health plan, including:
- The timeframes for enrollment;
- Instructions for how to access the SHOP web site and other tools to compare qualified health plans; and
- The SHOP toll-free hotline.
- Qualified employers must provide employees hired outside of the initial or annual open enrollment period with a specified period to seek coverage in a qualified health plan beginning on the first day of employment, as well as certain information about the enrollment process.
- A qualified employer participating in a SHOP also must provide the SHOP with information about individuals or employees whose eligibility to purchase coverage through the employer has changed, including newly eligible individuals as well as those no longer eligible for coverage (for example, due to a COBRA qualifying event).
- An employer may begin participating in a SHOP at any time.
- However, once an employer begins participating, it must adhere to an annual employer election period during which it may change employee offerings for the next plan year.
- If an employer remains eligible for coverage and does not take action during the annual employer election period, the employer would continue to offer the same plan, coverage level or plans selected the previous year for the next plan year, unless the qualified health plan(s) are no longer available.
To read the proposed rules in their entirety, please click here. Comments on the proposed rules must be received no later than October 31, 2011. For more on the Affordable Care Act, please visit the HR360 section on Health Care Reform.