Implementing Health Reform: SHOP Employee Choice State Opt-Outs And Navigator Grants (Updated)

Posted By Timothy Jost On June 10, 2014 @ 1:24 pm - Health Affairs

In All Categories,Employer-Sponsored Insurance,Health Reform,States

Editor’s note: This post was updated on June 10, 2014 to discuss CMS’s announcement of the availability of navigator grants for 2015.

On June 10, 2014, the Centers for Medicare and Medicaid Services released the list of federal exchange states where employee choice will not be available for the SHOP exchange for 2015 ^[1].  CMS had provided that the federal exchange would, beginning in 2015, permit employers in the SHOP exchange to either 1) choose a single plan for their employees, or 2) choose a metal tier (bronze, silver, gold, or platinum) and then allow employees to choose any plan offered within that tier, with the exchange aggregating premiums from the various plans chosen by employees and allowing the employer to pay a single premium. In the 2015 exchange final rule ^[2], however, CMS permitted state insurance commissioners in federal exchange states to ask that their states be allowed to opt out of employee choice for 2015 if they concluded that employee choice would cause adverse selection within their small group insurance markets.

Apparently, 18 state insurance commissioners asked that their states be allowed to opt out and all requests were granted. Federal exchange states that will not offer employee choice in 2015 include Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, and West Virginia. Employers in these states will be able to offer their employees a single health and a single dental plan through the SHOP exchange.

Employee choice will be available in 14 states: Arkansas, Florida, Georgia, Indiana, Iowa, Missouri, Nebraska, North Dakota, Ohio, Tennessee, Texas, Virginia, Wisconsin, and Wyoming. Employers in these states will be able to either offer their employees a single health and dental plan, or offer them a choice of health plans within a single metal level and dental plans within a single coverage level.

Barring a further change in policy, employee choice will be available in all federal exchange states in 2016. Employee choice was already available in most of the state exchange states for 2014, and presumably will continue to be so in 2015.

Employee choice has been one of the principle justifications for having SHOP exchanges, and postponing it another year makes will in all likelihood impede enrollment growth for 2015. On the other hand, the state decisions will give CMS another year to improve the functioning of the federal SHOP exchange and might strengthen it going forward.

2015 navigator grants. On June 10, 2014, CMS also announced the availability of navigator grants for the 2015 enrollment year ^[3].  (search grant CA-NAV-14-002). A fact sheet ^[4]and a set of FAQs ^[5] about the funding opportunity are also available. The grants will total $60 million for funding navigator programs in federal exchange and state partnership states. This compares with $54 million offered in the initial navigator funding announcement last year ^[6] and with $67 million actually awarded last year.

Grants will be awarded by state, with the amount based on the number of uninsured in each state but subject to a minimum of $600,000 per state. Texas is slated for grants totaling $9.4 million and Florida for $6.5 million.   Grants will be awarded in the 34 states currently served by federally facilitated or state partnership exchanges. The grant announcement notes that if any states currently served by state exchanges opt to become federal exchange states, “CMS will determine how to address funding for a Navigator program in this state at that time.”

Current grants will not be renewed automatically, but current grantees are encouraged to reapply. If current grantees seek funds above the amount they received last year, they must explain how additional funding will be used for new activities or staff expertise. Applicants must indicate their intent to apply by June 30, with applications due July 10. Award announcements will be made on September 8. As current grants expire as of August 14, 2014, it is not clear how current grantees are to bridge the gap between last year’s funding and this year’s.

The grant announcement recites the requirements imposed on navigators under existing regulations, including regulations recently finalized in the 2015 exchange final rule ^[2].  At least two types of navigator applicants will receive awards in each federal or state partnership exchange service area, including at least one community or consumer-focused nonprofit organization. Other eligible entities include trade, industry and professional associations; commercial fishing industry organizations; ranching and farming organizations; chambers of commerce; unions; resource partners of the Small Business Administration; licensed insurance agents and brokers; Indian tribes, tribal organizations, or urban Indian organizations; and State or local human services agencies.

Individuals may apply to be navigators, including agents and brokers who do not receive any payments from health insurance issuers or stop loss insurers. State or county agencies, including public hospitals, may also apply, except for state agencies in consumer-assistance partnership states. Small entities or individuals may also apply as part of consortium. Each entity that is part of a consortium, however, must be able to fulfill all navigator responsibilities

Applicants must describe their previous experience in working with consumers, including the uninsured and underinsured, and demonstrate their capacity to meet the linguistic and cultural needs of diverse communities. Applicants may serve more than one service area, as long as they have a physical presence in each service area served to provide face-to-face services. .

Applicants must comply with state licensing, certification, and other standards that are not preempted by federal law. The 2015 exchange rule clearly recognizes that state laws are preempted if they would prevent navigators from carrying out their federally required responsibilities or conflict with federal law. It is unclear what an applicant should do if it has been refused a state license because of state requirements that are preempted under the federal regulation.

One common state requirement is that navigator entities perform background checks on staff. The grant announcement does not require background checks; it does, however, state that if an entity performs background checks, and explains what would constitute an adverse finding and what actions would be taken in response to it, this will be a positive consideration in scoring grant applications. The grant announcement also lists databases to check. Presumably, serious grant applicants will institute background checks if they have not already done so.

Grants are made in the form of cooperative agreements, which are subject to tighter supervision than traditional federal grants. Grantees are required to make weekly, monthly, quarterly, and annual reports.

Coincidentally, the navigator grant funding announcement came out the same day as a new Health Reform Monitoring Survey Brief ^[7] from the Urban Institute examining sources used by nonelderly adults for information on marketplace coverage.  Although in all groups the website was the most common source of information consulted, minorities, older adults, women, and lower-income individuals also commonly used direct assistance from agents and brokers, navigators, and assistors. Although agents and brokers were rated as the most useful source of information, with 83.9 percent ranking them as very or somewhat helpful, navigators and other types of assisters ranked almost as high, at 77.3 percent.