CMS announces extension of SHOP direct enrollment transition

On April 18, 2016, CMS released guidance entitled “Extension of state-based SHOP Direct Enrollment Transition,” which extends the option of direct enrollment until the end of 2018 giving state based SHOPs more time to make online enrollment available. In order to allow facilitation of enrollment without SHOP portal functionality, CMS has allowed states to direct enroll employers and their employees, while also extending the small business tax credits to those eligible small employers offering coverage on a state-based SHOP utilizing direct enrollment.

This most recent guidance includes three options for states regarding enrolling SHOP eligible employers in 2019. States should begin planning now, because significant time is needed to not only give CMS notice but also to implement the option of choice.

The options for enrolling SHOP eligible employers’ post 2018 include:

1.   States may elect to use the FF-SHOP platform to perform SHOP functions while continuing to operate a state based individual marketplace. States that intend to take this   route must give CMS notice nine months before the transition.

2.   States may elect to use the SHOP online platforms of other states or insurance programs (i.e., private exchange) operating in the state.

3.   States may elect to apply for a 1332 waiver, much like the waiver recently submitted by the State of Vermont, to waive the direct enrollment requirements of the ACA. States would be required to demonstrate cost-effectiveness, as well as that the direct enrollment would enroll as many, if not more individuals than a SHOP portal enrollment in those states would. For more information on the requirements set forth for 1332 innovation waivers, please see the PCG summary on 1332 Innovation Waivers and the federal guidance issued December 16, 2015.

Additional Information is available here.

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