CMS Extends Direct Enrollment Transition for State-Based SHOPs

April 22, 2016


The Centers for Medicare & Medicaid Services (CMS) issued guidance announcing that it is extending the option for state-based Small Business Health Options Programs (SHOPs) to use direct enrollment for up to an additional two years (for plan years beginning in 2017 and 2018) as they transition to an online portal.  

CMS explains that this extension applies only to state-based SHOPs that currently utilize direct enrollment.  The guidance further notes that state-based SHOPs interested in continuing the direct enrollment option must submit a plan to CMS including a description of how the direct enrollment approach will meet three specific criteria and a plan for implementing their SHOP beyond the transitional period.  The three criteria, which were established under previous CMS guidance, are that state-based SHOPs utilizing direct enrollment must implement an approach under which: (1) the employer applies for, and receives, a favorable eligibility determination from the SHOP either before or after enrollment is completed; (2) eligible employees and dependents enroll in a SHOP qualified health plan; and (3) the SHOP qualified health plan issuer conducts enrollment consistent with all SHOP rules and policies.   

CMS indicates that for plan years beginning in 2019 and beyond, state-based Marketplaces should be prepared to either have in place online SHOP functionality or obtain a 1332 State Innovation Waiver to meet their SHOP obligations in another manner.