On the day before Thanksgiving, the Obama administration quietly announced plans to delay another part of the Affordable Care Act’s (ACA) Small Business Health Options Program, or SHOP, in states with a federally run health insurance marketplace.
SHOP is intended to help small business owners obtain health plans for themselves and their workers. However, according to a Nov. 27, 2013, online posting by the Department of Health and Human Services (HHS), employers who purchase small group coverage won’t be able to buy plans online through a federal SHOP exchange until November 2014 for plan year 2015. HHS also posted a set of questions and answers on how the federal SHOP would function, in a limited capacity, through 2014.
Starting next year, employer-provided health insurance must meet minimum ACA standards (see text box below), regardless of whether an employer falls under the ACA’s “shared responsibility” mandate, which, beginning in plan year 2015, requires businesses with 50 or more full-time equivalent workers to provide health care coverage. SHOP is intended to give small businesses access to a competitive, ACA-compliant health-coverage marketplace.
Under the ACA, each of the 50 states can set the size of its small group market at either one to 50 employees or one to 100 until 2016, and these small group employers can participate in SHOP. Beginning in 2016, all states must let employers with up to 100 workers purchase small group plans through SHOP. Starting in 2017, states may opt to let businesses with more than 100 employees buy large group coverage through SHOP.
Small Business Tax Credit Still Available
Eligible small businesses in states with a federally run SHOP can still take advantage of the ACA’s small business tax credit—which in tax years beginning in 2014 could be worth up to 50 percent of employer-paid premium costs—by:
- Enrolling their employees in coverage through an agent, a broker or an insurer that offers a certified SHOP plan and has agreed to conduct enrollment according to HHS standards.
- Alternatively, employers may fill out the application form themselves or call a special SHOP-exchange call center.
"We are happy to see HHS and the administration actively encourage small business owners to utilize agents and brokers," commented Janet Trautwein, CEO of the National Association of Health Underwriters, to SHRM Online. "Not only are agents able to help small business owners find a plan that fits the health care needs of their employees and the financial needs of their business, but agents also offer consumer protections to their clients. Long after a policy is sold, agents continue to administer plans by working directly with carries to resolve any billing and coverage issues that might arise."
The announcement further trims a program that was already substantially reduced. In March 2013, HHS announced a one-year delay to a key component of the SHOP marketplace on federally run exchanges. Before that announcement, eligible employers were expected to be able to use SHOP to select from among several competitive small group health plans that met the ACA’s mandated levels of coverage and state-specific requirements. But the November 2013 announcement said that in states with a federally run SHOP marketplace, the SHOP exchanges were required to offer only a single plan option, rather than multiple competitive options (see the SHRM Online article “ SHOP Exchange Delay Limits Small Employers’ Options ”).
While eligible employers can begin offering coverage through SHOP througout the year, for plans that begin on Jan. 1, 2014, the current signup deadline is Dec. 15. However, HHS said it will extend the enrollment deadline for the federal SHOP to Dec. 23.
State-Run Exchanges Have Options
“It is important to understand that this is not a delay of the federal SHOP exchange itself, but rather of one SHOP exchange functionality, albeit an important one,” explained Timothy Jost, a professor at the Washington and Lee University School of Law, in a post on the Health Affairs Blog . “The most important delays took place in March when employee choice and premium aggregation were put off. Employers should not experience any real adverse effects from this additional delay.”
Despite the latest HHS delays to the federally run SHOP marketplace, state-operated exchanges may offer employers additional ways to provide coverage through SHOP—including allowing their employees to choose among competing plans as in California, or a traditional “employer choice” offer of a single plan. Any option must still be available in each of the ACA’s metallic levels of bronze, silver, gold and platinum, plus "catastrophic" level plans limited to those under age 30.
Jost noted that states that operate their own exchanges (including Utah, which operates just a SHOP exchange) will still be able to offer online enrollment, “but in some of them the SHOP exchange is not yet functional or does not offer coverage through the entire state.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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