According to CMS, the delay is meant to allow for a smoother transition to employee choice, which requires that businesses chose a metal tier of coverage and allow their workers to select any health plan within that tier. Under a final rule issued by HHS last month, state insurance commissioners had the opportunity to submit a written recommendation that employee choice not be enacted in that state in 2015, if the commissioner felt not implementing that provision would be best for SHOP consumers. CMS states, “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.”
Under the PPACA, SHOPs create marketplaces designed to be one-stop shopping portals aggregating the purchasing power of numerous small companies. The federal government was originally scheduled to launch SHOP exchanges in 33 states in conjunction with the individual insurance marketplaces, but the White House decided to delay the launch by one year. According to CMS, the delay resulted from federal officials’ focus on getting the federal exchange for individuals, administered through HealthCare.gov, running smoothly last fall. As of this past March, 17 states and the District of Columbia had launched or planned to operate SHOP marketplaces this year, according to a report from The Commonwealth Fund.
Eighteen states with a federally facilitated SHOP will delay the implementation of employee choice until 2016. The remaining 14 states with federally run small business exchanges will join the majority of state-based SHOPs and make employee choice available in 2015, which will double the number of states with this option in place, according to CMS.
For more information, view the full list of states delaying employee choice here.
More Articles on SHOP:
CMS Finalizes PPACA Marketplace Standards
Commonwealth Fund: 3 Observations About the PPACA SHOP Marketplaces
CMS Estimates PPACA Could Raise Premiums for 11M Employees
