Will Window Shopping Save SHOP?

On May 15, 2017 the Centers for Medicare and Medicaid Services (CMS) announced plans to change how employers can shop in the federal SHOP (FF-SHOP) marketplace. The announcement proposes that federally facilitated SHOP plans will no longer offer online enrollment for plan years beginning in 2018. Instead, employers can use the federal SHOP to “window shop” for plans and obtain a determination of SHOP eligibility. This announcement follows through on discussions in the 2018 Notice of Benefit and Payment Parameters first published last summer.

Online enrollment in SHOP qualified plans would be done via direct insurer enrollment. This would mean that employers wishing to offer plans with multiple insurers will have to obtain quotes from each insurer and then enroll directly through each insurer. And, employers will be billed separately by each insurer for their enrolled employees.

The announcement notes that as of January 2017 there were approximately 7,600 employers with active FF-SHOP coverage covering about 39,000 individuals. Enrollment is well below the Congressional Budget Office (CBO) estimate for enrollment in 2017, initially projected to be 4 million enrollees nationwide.

Employers who want to use the small employer tax credit must create an account at HealthCare.gov to determine their eligibility for SHOP and the tax credit. Employers will be able to review available plans and prices on the site.

Brokers are expected to be integral to future success of the FF-SHOP. The announcement specifically refers to agents or brokers registered with SHOP as assisting employers. Brokers interested in working with the federal SHOP must still complete the Privacy and Security agreement to be a registered FF-SHOP broker. As a registered FF-SHOP broker they will also be listed in the “find an agent” feature at HealthCare.gov.

Another change made in the 2018 Notice of Benefit and Payment Parameters first published last summer may peak more interest in the SHOP. The requirement was that a federal exchange would only certify a QHP to offer coverage in the individual market if the issuer offered through the SHOP at least one silver and one gold plan when the insurer had at least a 20 percent share of the small group market in the state measured by earned premium. This policy known as the “tying policy,” was eliminated for 2018.

The change to “window shopping” will also mean that FF-SHOP qualified plans will no pay the 3.5% user fee for the plans.