Small Business Health Options Program (SHOP) Version: August 23,

This Training Four sections to this training: – Overview of Tribes and Tribal Entities as Employers – Small Business Health Options Program (SHOP) – Small Business Tax Credit (Tax Credit) – Employer Shared Responsibility 2

Small Business Health Options Program Topics What is SHOP? SHOP Functions Comparison with Individual Marketplace Eligibility, Definitions & Application SHOP Plans Enrollment, Contributions, & Premium Aggregation 3

What is SHOP? 4

SHOP = Small Business Health Options Program Designed to help small businesses purchase health insurance for employees. Each State will have a Marketplace (a/k/a Exchange) where individuals and small businesses can shop for health insurance. State, Federally-facilitated (FF), Partnership & Hybrid model in pending regulations (e.g., only SHOP run by State) Tribes and Tribal entities are eligible to participate. The SHOP will allow an employer to compare plans based on price, coverage and quality. 5

Status of 2014 Marketplace (Exchange) Implementation Source: C TR. ON B UDGET & P OLICY P RIORITIES, S TATUS OF S TATE H EALTH I NSURANCE E XCHANGE I MPLEMENTATION (Aug 6, 2013, 6

SHOP Marketplace in Your State Healthcare.gov marketplace-in-my-state/ The Commonwealth Fund Interactive Map Data/State-Exchange-Map.aspx 7

SHOP Functions 8

Among other functions, the SHOP: – Determines requirements for enrollment and eligibility. – Provides qualified health plan (QHP) options for employers. – Administers premium payments. – Certifies QHPs. – Determines participation rules. – Establishes methods for contributions. 9

Comparison with Individual Marketplace 10

Individual Marketplace vs. SHOP Generally DescriptionIndividual MarketplaceSHOP Individual Premium Tax Credits YesNo Essential Health BenefitsYes Premium AggregationFF: No State: No FF: In 2015 State: In 2014, State by State basis Metallic Level QHPsYes Multi-state PlansYes Navigator AssistanceYes 11

Individual Marketplace v. SHOP Specific to AI/AN DescriptionIndividual MarketplaceSHOP AI/AN Cost Sharing Reductions (Zero and Limited Cost Sharing plans for AI/ANs) YesNo AI/AN Special “Monthly” Enrollment in plans Yes Certificates of Exemption from Individual Assessable Payment YesNo 12

Eligibility, Definitions & Application 13

Employer Eligibility Generally, an employer is eligible to participate in SHOP if the employer: (1) Is a small employer on business days during the prior calendar year and who employs at least one employee on first day of the plan year; (2)Elects to offer all full-time employees coverage in a plan through a SHOP; and (3)Has its principal place of business address in the Exchange and offers coverage to all full-time employees through that SHOP; OR offers coverage to each eligible employee through the SHOP serving that employee’s primary worksite (in this case, the employer participates in multiple SHOPs). 14

Employer Eligibility (continued) Participation Rate Requirement – In Federally-facilitated SHOP, at least 70% of full- time employees must enroll in order for the employer to qualify (or a different rate as determined by State law). – If employer does not meet participation threshold, employer may enroll during a special enrollment period: 11/15/13 to 12/15/13. – For State-based SHOP, check SHOP application to determine participation rate requirement. 15

Employee Eligibility An employee (or employee’s family member) is a qualified individual eligible to enroll in coverage through the SHOP only if the employee (or the employee’s family member) receives an offer of coverage from a qualified employer. 16

Small Employer Definition State-based SHOP In 2014 and 2015, a State may elect to define as an employer with < 50 employees (or < 100 employees as determined by State) In 2016, will be defined as an employer with < 100 FTEs Federally-facilitated SHOP In 2014 and 2015, an employer with < 50 FTEs In 2016, will be defined as an employer with < 100 FTEs 17

Full-Time Employee Definition State-based SHOP In 2014 and 2015, a State may use the definition of full-time employee from the State’s small group market or the Federal definition. Look at State SHOP application for applicable definition. In 2016, the Federal definition of full-time employee will apply to State-based SHOPs. Federally-facilitated SHOP Beginning on October 1, 2013, the FF-SHOP will use the federal definition of full- time employee which is an employee who is employed an average of 30 hours of service per week (or 130 hours of service per month) 18

Counting Employees: State-based SHOP Counting method will vary by State. State-based SHOP application will explain counting method or check State-specific SHOP website. In 2016, a State-based SHOP must use the same method as the Federally-facilitated SHOPs (i.e., large employer counting method under Shared Employer Responsibility rules). 19

Counting Employees: Federally- facilitated SHOP To determine FTEs: 1.Count the number of full-time employees for each calendar month in the prior year. 2.Determine the number of full-time equivalent employees by adding the total number of hours of service of part-time employees in a calendar month and dividing by Add the number of full-time employees and full-time equivalent employees for each month of the calendar year. 4.Add up the 12 monthly numbers and divide by Exclude seasonal workers (120 hours or less) for the calendar year. 20

Application Process An employer may apply through the SHOP website, a Navigator, an insurance broker, or a call center Single SHOP application (on line & paper) – Separate applications for employer & employee The SHOP will: – Verify information in applications – Determine employer’s eligibility to participate – Notify employer as to denial or approval of application 21

SHOP Plans 22

Essential Health Benefits The plans in SHOP will include Essential Health Benefits (EHB): 1.Ambulatory patient service 2.Emergency services 3.Hospitalization 4.Maternity and newborn care 5.Mental health and substance use disorder services, including behavioral health treatment 6.Prescription drugs 7.Rehabilitative and habilitative services and devices 8.Laboratory services 9.Preventive and wellness services and chronic disease management 10.Pediatric services, including oral and vision care 23

SHOP Plans Different actuarial values (AV) in plans are described using “metallic” descriptors. All plans in the SHOP will have the same EHB. Plans may have different: – Network of providers – Premiums & cost sharing Metallic PlanActuarial Value Bronze (lowest premium, least beneficial) 60% Silver (Benchmark)70% Gold80% Platinum (highest premium, most beneficial) 90% 24

SHOP Plans (continued) Sources for Plans Offered in SHOP: 1.Qualified Health Plans (QHPs) 2.Multi-State Plans (MSPs) 25

Qualified Health Plans (QHPs) An insurance plan certified by an Exchange (Marketplace) Includes EHBs Follows established limits on cost-sharing – deductibles, copayments, and out-of-pocket maximum amounts Meets other requirements 26

Multi-State Plans (MSPs) Administered by the Office of Personnel Management (OPM) OPM contracts to offer at least 2 MSPs on SHOPs in each State. – 31 states in 2013, phased in to all states by 2018 MSPs at Silver and Gold level required; Bronze or Platinum permitted. Must include EHB. For MSPs, OPM sets the Benchmark. 27

Employer & Employee Choices YearState-based SHOPFF-SHOP 2014 Transition Period Employer selects one plan (or more, depending on State) which will be made available to employees. Employer selects one plan which will be made available to employees. 2015Employer may select: (1) a level of coverage and employee may select any plan in that metallic level; or (2) other options to offer employees. Employer may select: (1) a level of coverage and employee may select any plan in that metallic level; or (2) one plan to offer employees. 28

Enrollment, Contributions & Premium Aggregation 29

Enrollment Initial open enrollment period – October 1, 2013 SHOP must provide special enrollment periods. – American Indians and Alaska Natives may enroll in a plan or change plans once per month. Employer may purchase insurance at any time during the year (rolling enrollment). SHOP provides notice to the employer as to the annual employer enrollment period. 30

Employer and Employee Contributions State-based SHOP In 2014, a State-based SHOP may establish one or more standard methods that an employer may use to determine their contributions toward employee and dependent coverage. Federally-facilitated SHOP In 2014, an employer sets the contribution amount for employees (and dependents, if applicable) In 2015, a standardized method for employer contributions is required. 31

Premium Aggregation State-based SHOP In 2014, a State-based SHOP may aggregate premiums. In 2015, a State-based SHOP will aggregate premiums and provide a monthly invoice to employers that identifies the employer and employee contribution and total amount due to the plan issuers from the employer. Federally-facilitated SHOP In 2014, FF-SHOP will not aggregate premiums; employer pays insurance company directly. In 2015, FF-SHOP will aggregate premiums. 32

Preparation Learn about the options for your business at: Prepare a budget to determine how much you can spend on insurance. Gather and organize information about your employees. Talk to your HR Department, attorney and insurance broker about your options. Consider participating in SHOP because the Small Business Tax Credit will only be available for plans purchased in the SHOP in

Section Review What is SHOP? Are Tribes and Tribal entities eligible? Name one difference between SHOP and the Individual Marketplace? What is limit on number of employees for SHOP? In 2014, how many plans will an employer in an FF-SHOP offer to employees? In a State- based SHOP? 34

Questions 35