Small employers can shop, but can’t buy, on the SHOP Exchange

Last week, the Centers for Medicare & Medicaid Services (CMS) and the Department of Health & Human Services (HHS) announced a one year delay to the SHOP Exchange (or Marketplace).

The SHOP (Small Business Health Options Program), originally scheduled to go live on October 1, 2013 with the individual marketplace, was previously pushed back to November 1.  The first delay to online enrollment in the SHOP followed the Administration’s announcement of reduced functionality for 2014, back in April.  Last week, the Administration pushed online enrollment back even further.  Although small employers can review plan options in the SHOP, enrollment has to be done the old fashioned way – through an agent, broker or an insurance company.  The Administration calls this the “new direct enrollment process.”  On-line enrollment through the SHOP will not be available to small employers until November 2014.

The Affordable Care Act (ACA) does not require small employers (employers with fewer than 50 full-time equivalent employees) to offer health insurance to their employees, but it provides financial incentives for some small employers that do.  The Small Business Health Care Tax Credit, first available in 2010, increases in 2014 to up to 50% of employer-paid premium costs for qualifying small employers.  In order to access the credit, coverage must be purchased through an agent, broker or insurance company that offers plans through the SHOP and can conduct enrollment according to CMS standards.  A completed paper application for the Small Business Tax Credit will be submitted to the SHOP Marketplace either directly by the small employer, or by the agent, broker or insurance company.  Employee enrollment can begin before tax credit eligibility is determined.  If the SHOP later determines that the small business is ineligible for a tax credit, the insurance company is not required to terminate coverage.

Small employers that whish to make SHOP coverage effective for employees on January 1, 2014, must enroll by December 23, 2013.  The previous enrollment deadline of December 15 has been extended.  Access the CMS FAQs on the new direct enrollment process here and the companion blog post by HHS here.

When the SHOP website is fully functional, it is anticipated that small employers in all 50 States and the District of Columbia will be able to offer their employees a choice of plans from multiple issuers while making a single monthly payment, for coverage taking effect on or after January 1, 2015.  Currently, the direct enrollment process is available in states that are using the Federally Facilitated SHOP Marketplace (like North Carolina).  For businesses located in the few states that are running their own SHOP Marketplace, that state’s application and enrollment process must be followed.  For state status, contact your agent, broker or insurance company, or try your luck at HealthCare.gov or by calling the SHOP Employer Call Center, toll-free at 1-800-706-7893.

 

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