HHS May Delay SHOP Exchange, But Not California

The Department of Health and Human Services (HHS) issued a proposed rule delaying implementation of the Small Business Health Options Program (SHOP) for small businesses under the Protection and Affordability Act (PPACA). HHS said that  “Implementation challenges” led to the proposed one-year delay to January 1, 2015. Despite the delay in the federally operated exchanges, several states, including California, intend to move forward with the choice option for their state-operated exchanges.The choice option allows small employers to select a level of coverage (known as the bronze, silver, gold, and platinum coverage tier) from which their employees can choose any qualified health plan within the exchange, according to Intercare, a HUB International company.

Covered California exchange spokesperson, Dana Howard, told Intercare that exchanges are “not new territory for California. We are confident that Covered California will be ready for enrollment and implementation for a January 1, 2014 effective date.”

Small employers will still be able to purchase coverage though the federal exchange, but in 2014 that coverage is limited to the single health plan selected by the employer. A single health plan is another exchange option, which allows employers to select a single qualified health plan to offer employees. Beginning in 2014, those small employers that are eligible for the employer tax credit must purchase their plan through a state or federal exchange to qualify.

This delay does not affect individual coverage under the exchange. With 2014 right around the corner, the activity level for exchanges will increase rapidly.

Last Updated 09/16/2020

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