Final rule implements provisions of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act) related to the Small Business Health Options Program (SHOP)

Summary This final rule implements provisions of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act) related to the Small Business Health Options Program (SHOP). Specifically, this final rule amends existing regulations regarding triggering events and special enrollment periods for qualified employees and their dependents and implements a transitional policy regarding employees' choice of qualified health plans (QHPs) in the SHOP. Dates These regulations are effective on July 1, 2013. For Further Information Contact Leigha Basini at (301) 492-4307. Supplementary Information I. Executive Summary Beginning in 2014, individuals and small businesses will be able to purchase private health insurance through competitive marketplaces, called Affordable Insurance Exchanges or “Exchanges” (also called Health Insurance Marketplaces). Section 1311(b)(1)(B) of the Affordable Care Act contemplates that in each State there will be a SHOP that assists qualified employers in providing health insurance options for their employees. The final rule, Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers (Exchange Establishment Rule), (1) as modified by the Notice of Benefit and Payment Parameters for 2014, (2) sets forth standards for the administration of SHOP Exchanges. In this rule, we finalize provisions proposed in the Establishment of Exchanges and Qualified Health Plans; Small Business Health Options Program Notice of Proposed Rule Making, (3) which amends some of the standards established in the Exchange Establishment Rule. In the Exchange Establishment Rule, we established standards for special enrollment periods for people enrolled through an individual market Exchange, and provided that, in most instances, a special enrollment period is 60 days from the date of the triggering event. See 45 CFR 155.420. We also made these provisions applicable to SHOPs, at § 155.725(a)(3). In the proposed rule we proposed and this final rule amends, the special enrollment period for the SHOP to 30 days for most applicable triggering events, so that it aligns with the special enrollment periods for the group market established by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). (4) To further align the SHOP provisions with HIPAA, we also proposed that if an employee or dependent becomes eligible for premium assistance under Medicaid or the Children's Health Insurance Program (CHIP) or loses eligibility for Medicaid or CHIP, this would be a triggering event, and the employee or dependent would have a 60-day special enrollment period to select a QHP. This triggering event had previously been inadvertently omitted from the regulations because it applies only to group health plans and health insurance coverage in the group market. We also proposed to make a conforming change to § 156.285(b)(2), so that this section references the SHOP special enrollment periods in a way that is consistent with our proposed changes to § 155.725. In the Exchange Establishment Rule, we also set forth the minimum functions of a SHOP, including that the SHOP must allow employers the option to offer employees all QHPs at a level of coverage chosen by the employer, and that the SHOP may allow employers to offer one or more QHPs to qualified employees by other methods. We proposed and are now finalizing the following transitional policy. For plan years beginning on or after January 1, 2014 and before January 1, 2015, a SHOP will not be required to permit qualified employers to offer their qualified employees a choice of QHPs at a single level of coverage, but will have the option of doing so. Federally-facilitated SHOPs (FF-SHOPs) will not exercise this option, but will instead allow employers to choose a single QHP from the choices available in FF-SHOP to offer their qualified employees. This transitional policy is intended to provide additional time to prepare for an employee choice model and to increase the stability of the small group market while providing small groups with the benefits of SHOP in 2014 (such as a choice among competing QHPs and access for qualifying small employers to the small business health care tax credit). We also proposed changes to the effective date of the SHOP premium aggregation function set forth at § 155.705(b)(4) in the Exchange Establishment Rule consistent with this transitional policy, which we are finalizing in this rule. For the reasons set forth in the preamble, the Department of Health and Human Services amends 45 CFR parts 155 and 156 as set forth below: Regulatory Text Part 155 Exchange Establishment Standards and Other Related Standards Under the Affordable Care Act 1. The authority citation for part 155 continues to read as follows: Authority: Title I of the Affordable Care Act, sections 1301, 1302, 1303, 1304, 1311, 1312, 1313, 1321, 1322, 1331, 1334, 1402, 1411, 1412, 1413. 2. Section 155.705 is amended by revising paragraphs (b)(2) through (4) to read as follows: § 155.705 Functions of a SHOP. * * * * * (b) * * * (2) Employer choice requirements. With regard to QHPs offered through the SHOP for plan years beginning on or after January 1, 2015, the SHOP must allow a qualified employer to select a level of coverage as described in section 1302(d)(1) of the Affordable Care Act, in which all QHPs within that level are made available to the qualified employees of the employer. (3) SHOP options with respect to employer choice requirements. (i) For plan years beginning before January 1, 2015, a SHOP may allow a qualified employer to make one or more QHPs available to qualified employees: (A) By the method described in paragraph (b)(2) of this section, or (B) By a method other than the method described in paragraph (b)(2) of this section. (ii) For plan years beginning on or after January 1, 2015, a SHOP: (A) Must allow an employer to make available to qualified employees all QHPs at the level of coverage selected by the employer as described in paragraph (b)(2) of this section, and (B) May allow an employer to make one or more QHPs available to qualified employees by a method other than the method described in paragraph (b)(2) of this section. (iii) For plan years beginning before January 1, 2015, a Federally-facilitated SHOP will provide a qualified employer the choice to make available to qualified employees a single QHP. (iv) For plan years beginning on or after January 1, 2015, a Federally-facilitated SHOP will provide a qualified employer a choice of two methods to make QHPs available to qualified employees: (A) The employer may choose a level of coverage as described in paragraph (b)(2) of this section, or (B) The employer may choose a single QHP. (4)(i) Premium aggregation. Consistent with the effective dates set forth in paragraph (b)(4)(ii) of this section, the SHOP must perform the following functions related to premium payment administration: (A) Provide each qualified employer with a bill on a monthly basis that identifies the employer contribution, the employee contribution, and the total amount that is due to the QHP issuers from the qualified employer; (B) Collect from each employer the total amount due and make payments to QHP issuers in the SHOP for all enrollees; and (C) Maintain books, records, documents, and other evidence of accounting procedures and practices of the premium aggregation program for each benefit year for at least 10 years. (ii) Effective dates. (A) A State-based SHOP may elect to perform these functions for plan years beginning before January 1, 2015, but need not do so. (B) A Federally-facilitated SHOP will perform these functions only in plan years beginning on or after January 1, 2015. * * * * * 3. Section 155.725 is amended by: A. Amending paragraph (a)(1) by adding “and” at the end of the paragraph. B. Amending paragraph (a)(2) by removing “; and” and by adding a period in its place at the end of the paragraph. C. Removing paragraph (a)(3), and D. Adding paragraph (j). The addition reads as follows: § 155.725 Enrollment periods under SHOP. * * * * * (j)(1) Special enrollment periods. The SHOP must provide special enrollment periods consistent with this section, during which certain qualified employees or a dependent of a qualified employee may enroll in QHPs and enrollees may change QHPs. (2) The SHOP must provide a special enrollment period for a qualified employee or dependent of a qualified employee who: (i) Experiences an event described in § 155.420(d)(1), (2), (4), (5), (7), (8), or (9); (ii) Loses eligibility for coverage under a Medicaid plan under title XIX of the Social Security Act or a State child health plan under title XXI of the Social Security Act; or (iii) Becomes eligible for assistance, with respect to coverage under a SHOP, under such Medicaid plan or a State child health plan (including any waiver or demonstration project conducted under or in relation to such a plan). (3) A qualified employee or dependent of a qualified employee who experiences a qualifying event described in paragraph (j)(2) of this section has: (i) Thirty (30) days from the date of a triggering event described in paragraph (j)(2)(i) of this section to select a QHP through the SHOP; and (ii) Sixty (60) days from the date of a triggering event described in paragraph (j)(2)(ii) or (iii) of this section to select a QHP through the SHOP; (4) A dependent of a qualified employee is not eligible for a special election period if the employer does not extend the offer of coverage to dependents. (5) The effective dates of coverage are determined using the provisions of § 155.420(b). (6) Loss of minimum essential coverage is determined using the provisions of § 155.420(e). Part 156 Health Insurance Issuer Standards Under the Affordable Care Act Including Standards Related to Exchanges 4. The authority citation for part 156 continues to read as follows: Authority: Title I of the Affordable Care Act, sections 1301-1304, 1311-1312, 1321, 1322, 1324, 1334, 1341-1343, and 1401-1402, Pub l. 111-148, 124 Stat. 119 (42 U.S.C. 18042). 5. Section 156.285 is amended by revising paragraph (b)(2) to read as follows: § 156.285 Additional standards specific to SHOP. * * * * * (b) * * * (2) Provide special enrollment periods as described in § 155.725(j); * * * * * Dated: May 13, 2013. Marilyn Tavenner, Administrator, Centers for Medicare & Medicaid Services. Approved: May 15, 2013 Kathleen Sebelius, Secretary, Department of Health and Human Services. [FR Doc. 2013-13149 Filed 5-31-13; 11:15 am] BILLING CODE 4120-01-P http://www.regulations.gov/#!documentDetail;D=CMS_FRDOC_0001-1228