CMS
June 10, 2014
Small Business Health Options Program (SHOP)
On May 27, 2014, the Department of Health and Human Services (HHS) published
a final rule taking the next step in implementing “employee choice” in the Small
Business Health Options Program (SHOP). “Employee choice” provides
employers the opportunity to allow employees to choose any health plan at the
actuarial value, or “metal,” level selected by the employer.
Small business markets differ from state-to-state. To smooth the
transition to employee choice, HHS provided states with additional flexibility
by allowing State Insurance Commissioners to request that the SHOP in their
state not implement employee choice in 2015.
Under the final rule, State Insurance Commissioners were given an opportunity
to submit a written recommendation to the SHOP that employee choice not be
implemented in that state in 2015 if the State Insurance Commissioner concluded
that not implementing employee choice would be in the best interest of small
group market consumers in his or her state. This would be the case if the
Commissioner determines that implementing employee choice would cause issuers to
price products and plans higher in 2015 due to issuers’ beliefs about adverse
selection. This transitional policy applies to 2015, as HHS expects that
states and issuers will be able to learn from the experiences of issuers in
those SHOPs that have decided to implement employee choice in 2015 to prepare
for 2016. HHS is committed to implementing employee choice in a way that learns
from early experience and ensures its success.
Insurance Commissioners in states with a Federally-facilitated SHOP were
required to submit their recommendation letters to HHS by June 2, 2014.
Below is a list of all states with a Federally-facilitated SHOP and
provides information on whether each state will implement employee choice in
2015 or instead allow for transition relief. In total, 18 states with a
Federally-facilitated SHOP will allow for this transition relief in 2015. The
remaining 14 states with a Federally-facilitated SHOP will join most State-based
SHOPs and have employee choice available to small businesses in 2015, doubling
the number of states offering this option. In 2015, nearly two-thirds of
Americans will live in states where small business workers can choose a health
plan rather than have their employer do it for them.
HHS Approval of State Recommendations to Not Implement Employee Choice in
2015:
2015 Transition to Employee Choice
|
State
|
State Implementing Employee Choice in 2015
|
| Alabama |
NO |
| Alaska |
NO |
| Arizona |
NO |
| Arkansas |
YES |
| Delaware |
NO |
| Florida |
YES |
| Georgia |
YES |
| Illinois |
NO |
| Indiana |
YES |
| Iowa |
YES |
| Kansas |
NO |
| Louisiana |
NO |
| Maine |
NO |
| Michigan |
NO |
| Missouri |
YES |
| Montana |
NO |
| Nebraska |
YES |
| New Hampshire |
NO |
| New Jersey |
NO |
| North Carolina |
NO |
| North Dakota |
YES |
| Ohio |
YES |
| Oklahoma |
NO |
| Pennsylvania |
NO |
| South Carolina |
NO |
| South Dakota |
NO |
| Tennessee |
YES |
| Texas |
YES |
| Virginia |
YES |
| West Virginia |
NO |
| Wisconsin |
YES |
| Wyoming |
YES |
Notes:
- This is a one year not implemental policy and applies only for 2015.
Employers in states not implementing to employee choice will be able to offer
employees a single medical plan and a single dental plan.
- The following FFM States will have the default policy of employee choice
in 2015: Arkansas, Florida, Georgia, Indiana, Iowa, Missouri, Nebraska, North
Dakota, Ohio, Tennessee, Texas, Virginia, Wisconsin, and Wyoming. Employers in
these states may choose to offer employees either 1) all medical plans across
a single metal level and all dental plans across a single coverage level, or
2) a single medical plan and a single dental plan.
- Premium billing and payment services will be provided to all employers in
FF-SHOPs—whether or not employee choice is available or chosen by an
employer.
- This list does not include SBM States. We will post SBM states defaulting
to employee choice in 2015 as soon as all states have reported their decisions
to us.