Getting Small Business Health Coverage Through the SHOP Marketplace
Table of Contents
- Thank you for joining us today for an overview of the SHOP Marketplace.
- Health insurance, and theres no penalty if they choose not to.
- Federal government review any rate hike of 10% or more.
- Employees wages average less than $51.
- Renewals and changes to SHOP coverage, online.
- Of plans to offer, and how much to contribute to premium costs. In 2015.
00:00
Thank you for joining us today for an overview of the SHOP Marketplace,
and the application and enrollment process for SHOP coverage that starts
in 2015.
This presentation addresses the SHOP Marketplace run by the federal
government known as the Federally-facilitated SHOP Marketplace and also
as the FF-SHOP. States running their own SHOP Marketplace may operate
differently.
If youre unsure whether your state uses the Federally-facilitated SHOP
Marketplace or runs its own SHOP Marketplace, please visit
Healthcare.gov for more information.
This presentation is not intended for the press. If you are a member of
the press or other media outlets, please contact the CMS press office
for further information at press@cms.hhs.gov.
This presentation is also available on Marketplace.cms.gov.
Finally, the information presented here is not intended as legal or tax
01:02
advice. For such advice, we encourage you to contact a legal or tax
professional.
Thank you, and now, we'll begin.
This presentation explains the features of the Federally-facilitated
Small Business Health Options Program (FF-SHOP) and how these are
changing for plan years starting in 2015.
During the presentation, we will cover the following topics: What the
FF-SHOP is, Who can purchase FF-SHOP coverage and when Employee
participation requirements for small group plans ACA standards and
protections for SHOP Qualified Health Plans. How employers can browse
their coverage options before buying Coverage options for the
Self-Employed The Small Business Health Care Tax Credit The Employee
Choice option The Small Business Health Options Program (SHOP), is part
of the new Health Insurance Marketplace sometimes called an Exchange and
02:06
is available in every state. It was created to make it easier for small
employers to find and purchase health insurance for their employees.
Some states are running their own SHOP Marketplaces, while others are
participating in the Federally-facilitated SHOP Marketplace. This
presentation is focused on the Federally-facilitated SHOP Marketplace,
also known as the FF-SHOP Marketplace. The SHOP is open to employers
with 1-50 employees including non-profit and religious organizations.
The FF-SHOP Marketplace offers a choice of health and dental plans, and
tools to help customers make informed purchasing decisions. Employers
and their employees can submit initial group enrollments for SHOP
coverage at any time throughout the year. After the initial group
enrollment is submitted and coverage goes into effect, SHOP enrollments
are limited to an annual enrollment period for employees, special
03:11
enrollment periods, and enrollment periods for newly eligible employees.
In addition, if employers offer their employees coverage through the
SHOP, and meet other eligibility requirements, small employers may be
able to claim a Small Business Health Care Tax Credit worth up to 50%
percent of their premium contributions. Together, new insurance reforms
and the SHOP will help curb premium growth, and spur competition based
on price and quality. The SHOP Marketplace now lets small businesses
find and enroll in 2015 coverage online through HealthCare.gov. And, in
14 of the 33 states using the FF-SHOP, small employers now have the
option to offer their employees a choice of health plans, much like
large employers do. Small employers with fewer than 50
full-time-equivalent employees aren't required to offer their employees
04:12
health insurance, and theres no penalty if they choose not to. The
FF-SHOP is open to small employers with 1 to 50 full-time equivalent
employees (FTEs) Full-time equivalent employees generally include those
who work at least 30 hours per week. Part-time workers whose combined
hours total at least 30 hours per week, are also included when
determining FF-SHOP eligibility. Employers must have at least one
employee on payroll, who is not a business partner or spouse, to be
eligible for FF-SHOP coverage. To participate in the FF-SHOP employers
must offer coverage to all employees who work an average of 30 or more
hours per week. HealthCare.gov now offers an online tool--the SHOP FTE
Calculator--that can help employers count how many full-time equivalent
employees they have, to help determine if they might be eligible for the
05:13
Federally-facilitated SHOP. The FTE Calculator is based on the counting
method used by the FF-SHOP which, until 2016, may differ from the method
used by states running their own SHOP. Employers in a state with a
state-based SHOP should contact the SHOP in their state to learn more.
Small employers can offer employees health coverage through a FF-SHOP
now, or at any time during the year. In the FF-SHOP, if an employers
initial group enrollment is completed between the 1st and 15th day of
the month, coverage could begin as soon as the first day of the next
month. For example, if initial group enrollment is completed on March
10, group coverage could begin as soon as April 1. For initial group
enrollments completed after the 15th of the month, coverage could begin
as soon as the first day of the second following month. So, for
06:14
enrollment completed on March 18, group coverage could begin as soon as
May 1. Before employees can complete enrollment in an FF-SHOP plan, the
employer will generally need to meet the FF-SHOPs minimum
participation rate for their state. States and issuers may also set
different requirements for group plans offered outside the SHOP
Marketplace. In many states that are using the Federally-facilitated
SHOP, at least 70% of the business or groups employees who are offered
coverage must accept the offer before any employees can enroll. In a few
states, the FF-SHOP has set a different minimum participation rate, so
employers should check on HealthCare.gov to find out if their state is
one of these exceptions. An employers participation rate is determined
by taking the number of employees who are enrolling in coverage offered
through the SHOP, and dividing it by the total number of employees
07:17
offered coverage. Not every employee is counted for purposes of
determining the participation rate, such as employees with group
coverage through another job, another persons employer health plan or
through government-sponsored coverage such as Medicare, Medicaid, VA,
Indian Health Service, or TRICARE. An employees dependents also aren't
counted in determining the participation rate. However, employees who
are getting coverage through an individual health insurance plan are
counted for the purposes of this calculation. Employers dont need to
calculate their employee participation rate themselves, because the SHOP
enrollment application will do this, and will determine whether the
employer has met the minimum requirement, based on information provided
by employees when they accept or waive the employers coverage offer.
There is an exception to these minimum participation requirements. From
November 15 - December 15 each year, employers can buy small group
08:19
coverage inside or outside the SHOP Marketplace without having to meet
any applicable minimum participation requirement. Employers that offer
employees SHOP coverage can be sure theyve selected a plan that
conforms to the new standard. All health plans sold through the SHOP
Marketplace are known as Qualified Health Plans and include a package
of essential health benefits, like coverage for doctor visits,
preventive care, hospitalization, and prescription drugs. Employers and
employees buying group coverage will also have the benefit of an array
of other consumer and insurance protections offered by the health care
law. In the small group market, insurance companies generally must spend
at least 80% of premium dollars on health care and quality improvement
activities, and no more than 20% for other purposes, such as
administrative, overhead, and marketing costs. Health insurance
companies must also publicly disclose, justify and let the state or
09:24
federal government review any rate hike of 10% or more, before raising
premiums. Health insurance companies cant sell plans that charge
employers more because of a workers medical history, health condition
or disability. Nor can they sell plans that charge more for women based
on gender, and there are new limits on charging higher premiums for
older employees based on age. Also, insurance companies now generally
have to spread risk across a states small group market, rather than on
a group-by-group basis. This should help make premiums more stable from
year to year, over time. Before employers begin their SHOP application,
they can get a look at price estimates for all the 2015 Qualified Health
Plans and Qualified Dental Plans that the Federally Facilitated SHOP
offers in their area by using an online premium estimation tool. Users
answer a few quick questions, such as whether they're looking for health
10:28
benefits or dental benefits and select the state where their primary
business address is located. The price estimates are based on the
age-ranges of employees and where the business is located. Estimates
reflect prices for people who don't use tobacco. Insurers are allowed to
charge higher premiums for tobacco users. Agents, brokers or Navigators
can help employers use the tool and make plan comparisons. Once they're
ready to apply for coverage, employers can get a final quote on
HealthCare.gov as part of the online enrollment process. Neither the
price estimates on HealthCare.gov, nor the final quote will reflect any
savings an employer might be eligible to receive through the Small
Business Health Care Tax Credit after filing tax returns. Sole
proprietors, or shareholders of more than 2% of an S corporation that
has no common law employees, cant buy insurance through the SHOP. But
11:28
small employersand spousesmay qualify to buy insurance through the
Health Insurance Marketplace, which sells health insurance for
individuals and families. Depending on the level of household income, as
individuals, sole proprietors may qualify for tax credits through the
Health Insurance Marketplace. While small employers can complete an
initial group enrollment at any time during the year, individuals using
the Health Insurance Marketplace generally must enroll during the Open
Enrollment Period. For 2015 coverage, Open Enrollment for individuals
and families began on November 15, 2014 and continues until February 15,
2015. Outside of Open Enrollment, however, sole proprietors, the
self-employed and their families may be eligible for a Special
Enrollment Period in the Health Insurance Marketplace if there is a
change in life situation, known as a qualifying life event, and in
certain other, limited circumstances. Examples of qualifying life events
12:31
include: moving to a new state, certain changes in income, and changes
in family status or size like, if getting married, getting divorced or
having a baby. Visit HealthCare.gov for more information on premium
assistance, enrollment, and qualifying life events. The Small Business
Health Care tax credit was created to help small employers of
low-to-moderate-wage workers defray the costs of providing coverage. One
important reason for employers to consider offering employees SHOP
coverage is that, starting 2014, the credit is generally only available
to those who have employees enrolled in SHOP coverage. Employers may be
eligible for the credit if they have fewer than 25 full-time-equivalent
employees and those employees have average wages of less than $50,000 a
year. The average salary limit is adjusted for inflation beginning in
2014. For practical purposes, that means that an employer whose
13:35
employees wages average less than $51,000 may qualify for the credit in
tax year 2015. The limit on employer size applies to
full-time-equivalent employees. That means that employers who have
more than 25 lower-to-moderate wage part-time employees may still be
eligible for the credit. For example, two half-time employees might
equal one full-time-equivalent employee. Full-time equivalent employees
are calculated differently for purposes of the tax credit than for
determining whether an employer can use the SHOP Marketplace. The tax
credit bases full-time equivalent employees off a 40 hour work week. To
be eligible for the credit, employers must also pay at least 50% of
employees self-only health insurance premiums. The value of the tax
credit increased significantly starting with tax year 2014, and is now
worth up to 50% of the employers premium contribution (up to 35% for
14:41
tax-exempt employers). For tax years 2010 through 2013, the credit was
worth up to 35% of the employers contribution (25% for tax exempt
employers.) Employers who offered employees health insurance during any
of the years from 2010 to 2013, may still be able to claim the credit
for those years, and should consult a tax advisor for more information.
Starting with tax year 2014, the enhanced tax credit is available for
two consecutive yearseven for employers that have already claimed the
credit one or more times before 2014. Since the Small Business Health
Care Tax Credit became available in 2010, small employers have received
more than $1.5 billion in tax credits for contributions to employee
premium costs. To help employers learn if they might be eligible for the
tax credit, and how much that credit might be worth, HealthCare.gov
15:43
offers a tool, called the SHOP Tax Credit Estimator, available at the
web address listed here. Small employers can now access the SHOP online
at HealthCare.gov to: - Browse, select and offer employees health and
dental coverage that begins in 2015 - Have employees enroll in SHOP
coverage online - Find and authorize a SHOP-registered broker to help
with online enrollment Paper applications for SHOP coverage are no
longer distributed or accepted. SHOP-registered agents and brokers can
access new online features and manage accounts when authorized by
clients. Employers in 14 Federally-facilitated SHOP states can offer
employees a choice of plans within a single plan category. The SHOP Call
Center is now available to assist employees, as well as employers,
agents and brokers. The SHOP Marketplace offers employers a choice of
16:48
plan categories, insurance companies, and Qualified Health Plans.
Qualified Health Plans are grouped into 4 categories, each named for a
precious metal: Bronze, Silver, Gold, and Platinum. Categories generally
reflect how plans share the costs of care with the average enrollee.
Plans share costs with enrollees through deductibles, copayments and
coinsurance and out-of-pocket limits For example, the average employee
in a plan at the Bronze plan category is expected to pay approximately
40% of covered medical expenses, and the plan is expected to pay
approximately 60%. Please note, these percentages are for the average
individual and may vary somewhat from individual to individual.
Generally speaking, Qualified Health Plans that pay a larger share of an
employees medical expenses, also have higher premiums. As mentioned,
all Qualified Health Plans in the SHOP must offer benefits from each of
17:52
10 essential health benefit categories defined in the law, such as
coverage for doctor visits, preventive care, hospitalization and
prescriptions. Still, Qualified Health Plans, even within a single plan
category can differ in other wayssuch as in the networks of providers
or the prescription drug formularies offered Grouping plans into metal
categories allows consumers to compare plans with a similar level of
cost sharing. This, along with consideration of premiums, provider
networks, and other factors, can help the consumer make an informed
decision. Any employer who offered an FF-SHOP health plan to employees
in 2014 and wants to renew that SHOP coverage, needs to do so online.
Renewals cant be done for SHOP coverage by working directly with an
insurance company. SHOP-registered agent or brokers also have to handle
18:52
renewals and changes to SHOP coverage, online. Before beginning the
renewal process, employers should consider the timing of their renewal
offers, and keep in mind that they: - Must give employees at least one
week to decide whether to accept the offer, and - Must submit
enrollments by the 15th day of the month for coverage to start the first
day of the next month When renewing SHOP participation online, employers
will be asked the same questions asked on the 2014 application. They
should answer the questions based on information that applies for
2015with one important exception: - If an employer had 50 or fewer FTEs
when enrolling in 2014 but now has more than 50 FTEs, that employer
should attest to the statement that says the business has 50 or fewer
FTEs, based on last years attestation. The SHOP is required to let an
employer continue to participate in SHOP for 2015 if all of the
19:55
following apply. The employer: - Received a determination of eligibility
from the SHOP in 2014 - Had 50 or fewer FTE at the time SHOP
participation began in 2014 - Added employees after beginning SHOP
participation and now has more than 50 FTEs - Meets all other
requirements for participating in the SHOP If all of these factors
apply, an employer can attest to having 50 or fewer employees based on
the prior years attestation, and can continue to participate in the
SHOP in 2015
The ultimate goal of SHOP is to give small employers more options for
their employeesincluding the option to offer employees a choice among
health plans at in one plan category. In 2014, small employers in states
with a Federally-facilitated SHOP generally had a choice of health plans
and dental plans in different plan categories, from various health
21:00
insurance companies. Employers could select to offer employees only one
SHOP Qualified Health Plan and, if applicable, a single SHOP Qualified
Dental Plan. Some states running their own SHOP Marketplace gave
employers the option to offer employees a choice of plans. Now,
employers in 14 states using the Federally-facilitated SHOP can offer
employee choice. This means that an employer selects a plan category,
and then the employee can enroll in any plan available within that
category. Many states running their own SHOP Marketplace offer an
employee choice options, which may differ from the employee choice
option offered by the FF-SHOP Marketplace. In 2016, all states are
expected to offer small employers a choice between offering employees a
single SHOP plan, or letting employees select among multiple SHOP plans.
22:04
Offering employees a choice of plans can provide advantages for both
employers and employees. Employee choice can mean less hassle for
employers because they dont have to spend as much time trying to find
one plan to fit all. It means that employees can select the plan that
works best for their individual needs. Offering employees a choice of
health plans--as many large employers docan help a small business help
attract and retain valued employees. And when employees can choose their
own plan, insurers have to compete for their business which can lead to
lower costs and better service. With the SHOP Marketplace more choice
comes with less paperwork: no matter how many different insurance
companies or plans employees select, the employer gets and pays just one
monthly bill. The SHOP takes care of disbursing payments. Employees get
choice, but the employer sets basic limits, by deciding which category
23:08
of plans to offer, and how much to contribute to premium costs. In 2015,
in 14 of the 33 states using the Federally-facilitated SHOP, small
employers can offer their employees a single qualified health plan and,
if they choose, a single dental plan. Alternatively, they can let their
employees choose a plan within the plan category the employer selects.
In those states using the FF-SHOP and offering employee choice,
employers can offer employees a choice among all qualified health plans
in a single plan category that the employer selects. If applicable, the
employer can also offer employees a choice among all dental plans within
a single plan category that the employer selects. In any state using the
FF-SHOP, an employer can still choose to offer employees a single
qualified plan and (if applicable) a single dental plan, if the employer
24:11
prefers. The FF-SHOP offers many ways to get help: The toll-free SHOP
Call Center offers assistance to employers, agents and brokers, and now
also to employees enrolling in employer-offered SHOP coverage. Also, for
coverage beginning in 2015, employers who create an online account in
the SHOP Marketplace on HealthCare.gov can find a SHOP-registered local
agent or broker online, and can authorize that agent to help with
enrollment and to manage the employers SHOP account online. Employers
can also use the Find Local Help feature on HealthCare.gov to locate a
SHOP-registered agent or broker, or other assisters in their area,
without creating an online SHOP account. Employers just enter their city
and state, or their zip code, and select the Small Business Health
Options box.
Employers who want to work with an agent or broker they found through
25:12
Find Local Help, should ask the agent or broker if he or she has
registered with the SHOP Marketplace and has completed a SHOP
Marketplace profile. Only agents and brokers who have taken these steps
can complete an application for an employer.
The SHOP Marketplace offers a simpler way to find, and compare health
insurance and dental insurance options for small employers and
employees. New online features put the whole enrollment process online
at HealthCare.gov for coverage beginning in 2015. Beginning with tax
year 2014, small employers may qualify for a tax credit worth as much as
50% of their contribution to employee premiums when they buy coverage
through the SHOP Marketplace and meet other eligibility requirements.
HealthCare.gov offers straightforward information, useful links to
information about how the ACA affects small business and helpful tools,
26:16
like the SHOP FTE Calculator, SHOP Tax Credit Estimator, and the Premium
Estimate Tool Employers get a choice of health plans from multiple
insurance companies, and in different plan categories. Small employers
in the 14 Employee Choice states now have the option to choose a plan
category and let employees select any plan in that category. Help is
available and easy to find, through the HealthCare.gov Find local help
tool, the SHOP Call Center, and through the searchable online list of
FF-SHOP-registered agent or brokers thats available through the SHOP
application. For information about the FF-SHOP Marketplace and online
tools, visit Healthcare.gov/small-businesses. The IRS has in-depth
information about the Small Business Health Care Tax Credit on its
website. CMS.gov/CCIIO is the website for the federal Center on Consumer
27:21
Information and Insurance Oversight, and has detailed regulatory
information and guidance for the SHOP Marketplace, as well as a resource
page for Agents and Brokers, and information about other assisters.
Finally, to get news about the SHOP Marketplace, in 2015, online tools
and tips for small business owners, new health plans and prices, and
more, we encourage you to sign up for SHOP Email Updates at the web
address listed in the box on your screen.
Thank you again for joining us today.