Beginning in 2014, small employers may choose to provide health coverage to their employees through a Small Business Health Options Program (SHOP) Marketplace. Here are the top 5 questions we hear about SHOP:
How will a SHOP Marketplace operate?
For 2014, states with a federally facilitated Marketplace will have the employer choose one plan for all of its employees. Most state-run SHOP Marketplaces will allow employee choice of a plan at a metal level chosen by the employer beginning in 2014. Many of the federally-run Marketplaces will add this option in 2015, although a state may delay employee choice to 2016 if the insurance commissioner believes a delay would be in the best interest of consumers.
Are there requirements to participate in a SHOP Marketplace?
Yes. The employer must have employed an average of one to 50+ employees during the prior calendar or plan year. Part-time employees will generally count as full-time equivalent employees, using the same method as is used for determining whether the employer is large enough for employer-shared responsibilities to apply.
The small employer must offer SHOP coverage to all eligible full-time employees. There is no requirement under PPACA that employer contributions be made, but insurers may require contributions at a certain level. Employers that cannot meet minimum participation requirements may be limited to enrolling during an open enrollment period.
I have employees working in multiple states. How will that work?
Generally, the small employer will enroll all employees in the SHOP Marketplace in which its principal worksite is located. However, the employer may enroll employees in the SHOP of any state in which it has an office.
Is there annual re-enrollment in the SHOP Marketplace?
Yes. Employers will participate in the SHOP Marketplace for a 12-month plan year (which does not need to be a calendar year). If employees are allowed to choose their plan, they will be able to change their plan choice as part of the employer’s re-enrollment in the SHOP Marketplace.
Can new employees enroll midyear? What if an employee has a life event?
Newly eligible employees may enroll midyear, and their coverage will begin on the date they become eligible. An employee who has a special enrollment event may enroll or change plans within 30 days after the event.
+ The state may choose to set the maximum at 50 employees for 2014 and 2015 and all states have chosen to do this for 2014. The threshold will increase to 100 in 2016.
For further information about the health care reform requirements for your business, download UBA’s complimentary guide, “PPACA Compliance and Decision Guide for Small and Large Employers” from the PPACA Resource Center at http://bit.ly/1nHbaWv.