Federal Agencies Finalize Changes to SHOP Exchanges
Most Changes Apply Only to Federally-Facilitated SHOPs, SHOPs Using Federal Platform
A new final rule from the U.S. Department of Health and Human Services revises the enrollment processes in the Small Business Health Options Program (SHOP) Exchange for plan years beginning in 2018. Among other things, the final rule provides that SHOP Exchanges must:
- Provide required notices electronically, or, if an employer or employee elects, through standard mail (unless otherwise required by federal or state law);
- Limit waiting periods to 60 days, beginning on the date the employee becomes eligible—regardless of when the employer notifies the SHOP about the newly qualified employee;
- Provide an employee who becomes a qualified employee outside of the initial or annual open enrollment period with a 30-day enrollment period that begins on the date the employer notifies the SHOP about the newly qualified employee—employers are required to notify the SHOP on or before the 30th day after the day that the employee becomes a newly qualified employee; and
- Ensure that the coverage effective date for a newly qualified employee is the first day of the month following plan selection, unless the employee is subject to a waiting period.
In addition, for employers with variable hour employees that regularly make having a specified number of hours of service per period (or working full-time) a condition of eligibility, any measurement period that the employer uses to determine eligibility for SHOP coverage must not exceed 10 months (rather than the 12-month measurement period otherwise allowed).
Note: Most of the enrollment processes above are applicable only in federally-facilitated SHOPs (FF-SHOPs) or states using the federal platform for SHOP functions (SBE-FPs). The only finalized modification that applies to all SHOPs (both State-based SHOPs and FF-SHOPs) is the specification with regard to when SHOP waiting periods begin.
Click here to read the final rule in its entirety.
