Filed Under:Health Insurance, Individual Health

PPACA: CMS Talks SHOP

PPACA Toolbox (AP Photo/Jacquelyn Martin)
PPACA Toolbox (AP Photo/Jacquelyn Martin)

Officials at the Centers for Medicare & Medicaid Services (CMS) are expecting 200,000 small U.S. employers to apply to participate in Small Business Health Option Program (SHOP) exchanges in 2014.

The number of employers that submit SHOP exchange applications could fall to 133,333 in 2015, then jump back up to 200,000 in 2016, CMS officials say in an information collection notice that appears today in the Federal Register.

The Patient Protection and Affordable Care Act of 2010 (PPACA) calls for states to work with federal agencies to develop exchanges, or Web-based health insurance supermarkets, that individuals can use to apply for public health insurance coverage and use new tax subsidies to buy commercial coverage.

PPACA also calls for states to set up SHOP exchanges for small employers. The SHOP exchanges could operate either as stand-alone programs or in exchange programs that would serve both individuals and small employers.

PPACA drafters included the SHOP provisions in the law in an effort to help small employers in states where small group rates are high and the number of insurers in the small group market is slow.

Although the Supreme Court has rebuffed one set of legal challenges to PPACA, opponents of the law continue to fight it in the courts, in Congress and in state capitals.

States can choose whether to run SHOP exchanges and exchanges for individuals themselves or let the federal government provide exchange services for their residents. Republicans in Congress have written to state governors to encourage them to resist efforts to set up exchanges in their states.

Federal law requires CMS to give members of the public to comment when it is about to start new data collection programs.

CMS officials put the two proposed SHOP data collection efforts in a collection activities notice that included a total of four new PPACA exchange collection activities.

For the SHOP program, CMS expects to have to set up an eligibility determination and enrollment process for small employers and an eligibility determination and enrollment process for the small employers' employees.

In addition to the SHOP collection initiatives, CMS officials are seeking approval for an application process for insurers that want to sell coverage through PPACA exchanges and a Medicaid and Children's Health Insurance Program eligibility determination process for individuals who apply for coverage through PPACA exchanges.

Officials are estimating, based on Congressional Budget Office (CBO) projections, that a total of about 3 million families will get health insurance through 200,000 SHOP exchanges in 2014, with participating employers having an average of 5 employees eligible for coverage, and participating employees having an average family size of 3.

In 2015, 2 million families may get SHOP coverage through 133,333 employers, and the numbers could rebound to 2016 levels in 2016, officials say.

The first SHOP exchange coverage open enrollment will start in October 2013, officials say.

The U.S. Department of Health and Human Services (HHS), the parent of CMS, has developed a single, streamlined form that employers can use to apply for a SHOP exchange and see if they meet size requirements and other requirements, officials say.

"Employers will be able to submit an application for the SHOP online, using a paper application, over the phone through a call center operated by an Exchange, or in person through an agent, broker, or Navigator," officials say.

CMS officials are hoping submitting the paper application will take an average of about 13 minutes per applicant. 

"We had several individuals fill out the paper application, averaged their times to complete the application, and factored in additional time due to potential variation in applicants’ health literacy rate," officials say.

Similarly, individuals will be able to file their applications through agents, brokers or Navigators, officials say.

Filling out an individual application might take an average of about 10 minutes, officials estimate.

 

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