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HHS Allows 18 States to Delay Employee Choice SHOP Feature Until 2016

By Kerry Young, CQ HealthBeat Associate Editor

June 10, 2014 -- The Department of Health and Human Services (HHS) will allow 18 states to put off a feature that allows workers in a small business to individually choose which health plan they want rather than leave that choice to the owner. 

HHS released a list of the states last week that can delay this feature in the insurance exchanges they offer for small businesses under the health care overhaul law (PL 111-148, PL 111-152). 

The health law program involved is the Small Business Health Options Program (SHOP). 

"This transitional policy applies to 2015," the department said." HHS expects that states and issuers will be able to learn from the experiences of issuers in those SHOPs that have decided to implement employee choice in 2015 to prepare for 2016," HHS said in a web posting. 

Despite the delays, HHS said that in 2015 about two-thirds of Americans will live in states where small business workers can choose a health plan through the SHOP option instead of the employer picking the plan. The states given the reprieve were Alabama, Alaska, Arizona, Delaware, Illinois, Kansas, Louisiana, Maine, Michigan, Montana, New Hampshire, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, and West Virginia.

A final rule published by HHS May 27 gave state insurance commissioners a chance to recommend against implementing employee choice in 2015. They had to do so by June 2. Commissioners could take that step if they thought adopting the feature would cause insurers to charge higher premiums out of fear that an unusually large number of bad insurance risks would enroll in their plans.

The states involved are those that offer a SHOP exchange through the federal marketplace. Fourteen of the states relying on the federal exchange chose to go ahead with employee choice, doubling the number of states offering this option.

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