CMS Proposes More Flexibility for Small Businesses Enrolling Through the SHOP

On May 15, 2017, CMS announced plans to discontinue use of to enroll small employers and employees into the federally facilitated SHOP (Small Business Health Options Program) exchange effective Jan. 1, 2018. This decision comes as a result of lower than expected broker/agent participation and enrollment numbers. According to CMS, there were only 270,000 employees enrolled nationwide as of January 2017 (including federal and state-based SHOPs), which considerably falls short of the four million estimated to be enrolled by 2017.

Currently, small employers may only qualify for the Small Business Health Care Tax Credit by applying for coverage and enrolling employees through the SHOP. However, this process has been seen as overly burdensome and difficult for employers, employees, brokers and carriers involved, and is generally blamed for low utilization of the SHOP.

Therefore, in an effort to encourage greater broker and carrier participation and increase employee enrollment, CMS proposes rulemaking that would alter how small businesses receive the Small Business Health Care Tax Credit. The rules would also change the way small businesses enroll their employees. Beginning in 2018, small groups in states that use the federally facilitated will continue to receive a determination of eligibility for the tax credit through, but will instead enroll in coverage through a broker or directly with the carrier.

In addition, CMS proposes that state-based SHOP exchanges could decide to continue offering online enrollment, or instead require enrollment directly with the insurance company or through the assistance of an agent/broker.

Small employers may only enroll through until Nov. 15, 2017. Groups that presently have SHOP plans may continue to pay premiums through until renewal in 2018.

CMS Memo »