States had until June 1 to tell the Department of Health and Human Services (HHS) whether or not they wanted to implement the employee choice program in their Small Business Health Options Program (SHOP) exchanges in 2015. The employee choice in the SHOP would provide employers the opportunity to allow employees to choose any health plan at the actuarial value, or “metal” level, selected by the employer. Eighteen states submitted proposals to delay employee choice within the SHOP until 2016 and HHS granted all 18 proposals. The 18 states are: Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota and West Virginia. On the other hand, as many as 33 states will implement employee choice in the SHOP in 2015.
Many proponents of the SHOP are not happy about HHS’ decision to delay employee choice once again. You may remember that the SHOP exchange has arguably had the hardest time getting off the ground. In federally facilitated states, online enrollment was delayed until 2015, meaning that those few employers who were interested in the SHOP had to enroll via paper application, which obviously made the marketplace less appealing for many employers. Furthermore, there are many other reasons why SHOP coverage in most states is more complicated for employers and just or even more costly to offer as traditional small group coverage, thereby limiting its appeal for most small employers. Many small business groups felt that employee choice was the best thing SHOP has to offer and have announced they are unhappy with the additional delay. Namely, the Small Business Majority CEO John Arensmeyer, who spoke at the NAHU 2013 Capitol Conference, said choice is the single biggest competitive advantage for SHOP. It’s the feature of the exchange that’s most likely to draw in new businesses and now 18 states won’t have it. On the flip side, insurance commissioners in the 18 states feel that their small group markets will be more stable in 2015.
In other HHS news, the Centers for Medicare and Medicaid Services (CMS) announced an additional $60 million in funding for navigators working in states relying on the federal marketplace and in partnerships. Last year, CMS granted $67 million worth of funding for navigators. Those who wish to be a navigator for the 2015 enrollment cycle, even those who were navigators in 2014, have to apply before July 10. The final regulations released on May 27 finalizing the rules for the exchange marketplaces for 2015 encouraged navigator groups to run background checks on all of their trained navigators as a consumer protection. They will also be required to submit weekly and monthly progress reports to CMS.