Blue Cross and Blue Shield of Illinois

 

 

April 12, 2013

Legislative Update
Proposed Rule Delays Part of SHOP Exchange
You may have recently read media stories reporting that SHOP – Small Business Health Options Program – has been delayed until 2015. We wanted to provide information to update you on what is happening with SHOP in 2014.

In a proposed rule published on March 11, the U.S. Department of Health & Human Services (HHS) would delay a part of the SHOP exchange until 2015. SHOP is an exchange created by the Affordable Care Act (ACA) for small businesses and their employees. However, the proposed rule does not delay the entire program.

Through the SHOP exchange (also known as a marketplace), small employers (1-100, or 1-50 until 2016 if a state allows it) will be able to buy health coverage for their employees. Small businesses may also be eligible for the Small Business Tax Credit that is only available on the SHOP exchange.

HHS regulations interpreting ACA originally provided employers three options for providing health insurance to their employees via SHOP:

  • Employer choice: Employer may select one or more specific plans on behalf of employees or self
  • Hybrid choice: Employer can select metallic level and then an employee can select any plan (from any carrier) within that level
  • Employee choice: Employee can select any plan being offered on the exchange, if it meets SHOP requirements

The proposed rule would delay these options until 2015 for federally facilitated SHOP exchanges, including state partnership exchanges. Instead, in these exchanges, only the employer choice purchasing model is available. This means the employers select one plan for employees in 2014. The proposed rule would also delay the premium aggregation function of the SHOP exchange, which allows a SHOP to collect payments from multiple sources and submit them to the carrier, rather than having small businesses pay the insurer directly.

Under the proposed rule, state-based SHOP exchanges would still be able to offer either employee choice or employer choice in 2014. It would also allow those SHOPs to defer premium aggregation until 2015.

The comment period on the proposed rule closed on April 1. The final rule is under development. We will provide updates as the government releases additional information.

 

 
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A Division of Health Care Service Corporation, a Mutual Legal Reserve Company,
an Independent Licensee of the Blue Cross and Blue Shield Association.