The U.S. Department of Health and Human Services (HHS) is letting states with HHS-run public exchanges decide whether to offer small employers a multiple-plan coverage option in 2015. Eighteen HHS exchange states have decided against offering the “employee choice” option. Fourteen states with HHS-run exchanges will try to offer employers an option.
In some states – Arkansas, Florida, Georgia, Indiana, Iowa, Missouri, Nebraska, North Dakota, Ohio, Tennessee, Texas, Virginia, Wisconsin and Wyoming — the employer choice option will be the default coverage option.
In a state with an employee choice option, a small employer that gets “qualified health plan” (QHP) coverage from a Small Business Health Options Program (SHOP) exchange can offer employees a chance to choose any QHP available within a specified coverage “metal level.”
If, for example, XYZ Auto Parts chose the “Gold Employee Choice Option,” the employees could sign up for any gold-level group QHP available in that market. The program would not necessarily guarantee that the employees would have a long menu of coverage options.
This year, some U.S. counties have only one SHOP QHP provider, and some have none. Employers in states without a SHOP exchange employee choice option could offer traditional, single-plan coverage.
Officials at the Center for Consumer Information & Insurance Oversight (CCIIO) — the HHS arm in charge of HHS efforts to implement the commercial health insurance provisions of the Patient Protection and Affordable Care Act (PPACA) — have announced the state employee choice option decisions with a list on the CCIIO website.
The list includes only the states that have HHS-run exchanges this year. The list does not include Idaho, which hopes to run its own exchange in 2015. The list also leaves out some states that have talked about shutting down state-based exchange programs next year and letting HHS run their exchange programs.
CCIIO officials note in the new employee choice decision form that the list of states that will and will not offer the choice option could change in 2016.
HHS will offer premium billing and payment services in all states with HHS-run SHOP exchange programs in 2015, whether or not the employer has access to the employer choice option, officials say. Developers of the early health insurance exchange programs, which were often known as “health insurance purchasing cooperatives,” often used access to employee choice as a major selling point. The Federal Employees Health Benefits Program has offered employee choice since 1960.
John M. Word III and Rusty Brown, the partners in charge of Word & Brown, won an award from the Health Insurance Association of America in 2002 for their efforts to create a commercial employer choice program, the CaliforniaChoice health insurance purchasing cooperative.
Drafters of the legislation that became PPACA used access to employee choice as a major reason to get a bill through Congress. But HHS announced in 2013 that it was postponing access to the employee choice option in states with HHS-run exchanges.
This year, officials at the Centers for Medicare & Medicaid Services (CMS) — the division of HHS that houses CCIIO — created a form for states that were thinking about having HHS-run SHOP exchanges offer an employee choice option in 2015.
“Please adequately explain that it is in your expert judgment, based on a documented assessment of the full landscape of the small group market in your state that the 2015 Transition to Employee Choice would be in the best interest of small employers and their employees and dependents, given the likelihood that implementing employee choice would cause issuers to price their products and plans higher than they would otherwise price them,” CMS officials say in the form instructions. ”Please base your recommendation on discussions with those issuers expected to participate in the SHOP, including naming those issuers,” officials said.