Small Business Health Options
Program (SHOP)
Version: August 23, 2013
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This Training
• Four sections to this training:
– Overview of Tribes and Tribal Entities as
Employers
– Small Business Health Options Program (SHOP)
– Small Business Tax Credit (Tax Credit)
– Employer Shared Responsibility
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Small Business Health Options
Program Topics
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•
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What is SHOP?
SHOP Functions
Comparison with Individual Marketplace
Eligibility, Definitions & Application
SHOP Plans
Enrollment, Contributions, & Premium
Aggregation
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What is SHOP?
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What is SHOP?
• SHOP = Small Business Health Options Program
• Designed to help small businesses purchase health
insurance for employees.
• Each State will have a Marketplace (a/k/a Exchange)
where individuals and small businesses can shop for
health insurance.
• State, Federally-facilitated (FF), Partnership & Hybrid model
in pending regulations (e.g., only SHOP run by State)
• Tribes and Tribal entities are eligible to participate.
• The SHOP will allow an employer to compare plans
based on price, coverage and quality.
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Status of 2014 Marketplace (Exchange) Implementation
Source: CTR. ON BUDGET & POLICY PRIORITIES, STATUS OF STATE HEALTH INSURANCE EXCHANGE IMPLEMENTATION (Aug 6,
2013, http://www.cbpp.org/files/CBPP-Analysis-on-the-Status-of-State-Exchange-Implementation.pdf.
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SHOP Marketplace in Your State
• Healthcare.gov
https://www.healthcare.gov/what-is-themarketplace-in-my-state/
• The Commonwealth Fund Interactive Map
http://www.commonwealthfund.org/Maps-andData/State-Exchange-Map.aspx
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SHOP Functions
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SHOP Functions
• Among other functions, the SHOP:
– Determines requirements for enrollment and
eligibility.
– Provides qualified health plan (QHP) options for
employers.
– Administers premium payments.
– Certifies QHPs.
– Determines participation rules.
– Establishes methods for contributions.
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Comparison with
Individual Marketplace
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Individual Marketplace vs. SHOP
Generally
Description
Individual Marketplace
SHOP
Individual Premium Tax
Credits
Yes
No
Essential Health Benefits
Yes
Yes
FF: No
State: No
FF: In 2015
State: In 2014, State by
State basis
Metallic Level QHPs
Yes
Yes
Multi-state Plans
Yes
Yes
Navigator Assistance
Yes
Yes
Premium Aggregation
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Individual Marketplace v. SHOP
Specific to AI/AN
Description
Individual Marketplace
SHOP
AI/AN Cost Sharing
Reductions (Zero and
Limited Cost Sharing plans
for AI/ANs)
Yes
No
AI/AN Special “Monthly”
Enrollment in plans
Yes
Yes
Certificates of Exemption
from Individual Assessable
Payment
Yes
No
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Eligibility, Definitions &
Application
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Employer Eligibility
Generally, an employer is eligible to participate in
SHOP if the employer:
(1) Is a small employer on business days during the prior
calendar year and who employs at least one employee on first
day of the plan year;
(2)Elects to offer all full-time employees coverage in a plan
through a SHOP; and
(3)Has its principal place of business address in the Exchange and
offers coverage to all full-time employees through that SHOP; OR
offers coverage to each eligible employee through the SHOP
serving that employee’s primary worksite (in this case, the
employer participates in multiple SHOPs).
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Employer Eligibility (continued)
• Participation Rate Requirement
– In Federally-facilitated SHOP, at least 70% of fulltime employees must enroll in order for the
employer to qualify (or a different rate as
determined by State law).
– If employer does not meet participation
threshold, employer may enroll during a special
enrollment period: 11/15/13 to 12/15/13.
– For State-based SHOP, check SHOP application to
determine participation rate requirement.
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Employee Eligibility
An employee (or employee’s family member) is
a qualified individual eligible to enroll in
coverage through the SHOP only if the employee
(or the employee’s family member) receives an
offer of coverage from a qualified employer.
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Small Employer Definition
State-based SHOP
• In 2014 and 2015, a
State may elect to
define as an employer
with < 50 employees (or
< 100 employees as
determined by State)
• In 2016, will be defined
as an employer with <
100 FTEs
Federally-facilitated SHOP
• In 2014 and 2015, an
employer with < 50
FTEs
• In 2016, will be defined
as an employer with <
100 FTEs
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Full-Time Employee Definition
State-based SHOP
•In 2014 and 2015, a State may
use the definition of full-time
employee from the State’s
small group market or the
Federal definition. Look at
State SHOP application for
applicable definition.
•In 2016, the Federal definition
of full-time employee will
apply to State-based SHOPs.
Federally-facilitated SHOP
• Beginning on October 1,
2013, the FF-SHOP will use
the federal definition of fulltime employee which is an
employee who is employed
an average of 30 hours of
service per week (or 130
hours of service per month)
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Counting Employees: State-based
SHOP
• Counting method will vary by State.
• State-based SHOP application will explain counting
method or check State-specific SHOP website.
• In 2016, a State-based SHOP must use the same
method as the Federally-facilitated SHOPs (i.e., large
employer counting method under Shared Employer
Responsibility rules).
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Counting Employees: Federallyfacilitated SHOP
To determine FTEs:
1. Count the number of full-time employees for each calendar
month in the prior year.
2. Determine the number of full-time equivalent employees by
adding the total number of hours of service of part-time
employees in a calendar month and dividing by 120.
3. Add the number of full-time employees and full-time
equivalent employees for each month of the calendar year.
4. Add up the 12 monthly numbers and divide by 12.
5. Exclude seasonal workers (120 hours or less) for the calendar
year.
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Application Process
• An employer may apply through the SHOP
website, a Navigator, an insurance broker, or a
call center
• Single SHOP application (on line & paper)
– Separate applications for employer & employee
• The SHOP will:
– Verify information in applications
– Determine employer’s eligibility to participate
– Notify employer as to denial or approval of
application
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SHOP Plans
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Essential Health Benefits
The plans in SHOP will include Essential Health Benefits (EHB):
1.
2.
3.
4.
5.
Ambulatory patient service
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance use disorder services, including
behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care
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SHOP Plans
• Different actuarial values
(AV) in plans are described
using “metallic” descriptors.
• All plans in the SHOP will
have the same EHB.
• Plans may have different:
– Network of providers
– Premiums & cost sharing
Metallic Plan
Actuarial
Value
Bronze (lowest premium,
least beneficial)
60%
Silver (Benchmark)
70%
Gold
80%
Platinum (highest
premium, most beneficial)
90%
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SHOP Plans
(continued)
Sources for Plans Offered in SHOP:
1. Qualified Health Plans (QHPs)
2. Multi-State Plans (MSPs)
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Qualified Health Plans (QHPs)
• An insurance plan certified by an Exchange
(Marketplace)
• Includes EHBs
• Follows established limits on cost-sharing
– deductibles, copayments, and out-of-pocket
maximum amounts
• Meets other requirements
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Multi-State Plans (MSPs)
• Administered by the Office of Personnel
Management (OPM)
• OPM contracts to offer at least 2 MSPs on
SHOPs in each State.
– 31 states in 2013, phased in to all states by 2018
• MSPs at Silver and Gold level required; Bronze
or Platinum permitted.
• Must include EHB.
• For MSPs, OPM sets the Benchmark.
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Employer & Employee Choices
Year
State-based SHOP
FF-SHOP
2014
Employer selects one plan (or
more, depending on State)
which will be made available
to employees.
Employer selects one plan which
will be made available to
employees.
Employer may select:
(1) a level of coverage and
employee may select any plan
in that metallic level; or
(2) other options to offer
employees.
Employer may select:
(1) a level of coverage and
employee may select any plan in
that metallic level; or
(2) one plan to offer employees.
Transition
Period
2015
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Enrollment, Contributions
& Premium Aggregation
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Enrollment
• Initial open enrollment period
– October 1, 2013
• SHOP must provide special enrollment
periods.
– American Indians and Alaska Natives may enroll in
a plan or change plans once per month.
• Employer may purchase insurance at any time during
the year (rolling enrollment).
• SHOP provides notice to the employer as to the
annual employer enrollment period.
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Employer and Employee Contributions
State-based SHOP
• In 2014, a State-based
SHOP may establish one
or more standard
methods that an
employer may use to
determine their
contributions toward
employee and
dependent coverage.
Federally-facilitated SHOP
• In 2014, an employer
sets the contribution
amount for employees
(and dependents, if
applicable)
• In 2015, a standardized
method for employer
contributions is
required.
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Premium Aggregation
State-based SHOP
Federally-facilitated SHOP
• In 2014, a State-based SHOP
may aggregate premiums.
• In 2015, a State-based SHOP
will aggregate premiums
and provide a monthly
invoice to employers that
identifies the employer and
employee contribution and
total amount due to the
plan issuers from the
employer.
• In 2014, FF-SHOP will not
aggregate premiums;
employer pays insurance
company directly.
• In 2015, FF-SHOP will
aggregate premiums.
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Preparation
• Learn about the options for your business
at:http://business.usa.gov/healthcare
• Prepare a budget to determine how much you can
spend on insurance.
• Gather and organize information about your
employees.
• Talk to your HR Department, attorney and insurance
broker about your options.
• Consider participating in SHOP because the Small
Business Tax Credit will only be available for plans
purchased in the SHOP in 2014.
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Section Review
• What is SHOP?
• Are Tribes and Tribal entities eligible?
• Name one difference between SHOP and the
Individual Marketplace?
• What is limit on number of employees for
SHOP?
• In 2014, how many plans will an employer in
an FF-SHOP offer to employees? In a Statebased SHOP?
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Questions
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