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Employer Application And Enrollment

Agent Assisted Employer Application and Enrollment in a SHOP

An agent or broker may assist employers with a SHOP application and enrollment directly on the SHOP website. The employer must first log directly into his or her own SHOP account. The agent or broker may assist the employer in creating his or her account if needed, but the employer must create his or her own Marketplace username and password and should not share this information with third parties, including agents and brokers. The agent or broker will then assist with completing the application, where the employer will be prompted to enter the agent or broker’s National Producer Number (NPN) and other identifying information.

Note: There are 12 enrollment cycles per year; one per month.

  • There are nine steps for agents and brokers to help employers apply and enroll in a SHOP plan:
    1. Import basic information about the employer’s business on the SHOP website
    2. Create an employee roster with basic information about each employee
    3. Employer reads information about each plan on the SHOP website
    4. Employer selects a QHP— the “reference plan”
    5. Employer chooses a defined percentage of the reference plan to contribute for each employee
    6. Employer decides whether all employees will contribute the same amount for coverage or pay a premium based on age
    7. Employer reviews summary of choices
    8. Agents and brokers help employees enroll in SHOP
    9. Employer reviews completed application
  • An employer must submit the first month’s premium after employees enroll, and the employer reviews and approves the completed application.
  • In 2014, employers will pay QHP issuers directly.
Enrollment Steps Explained

Step 1:
Agents can help employers input basic information about their businesses.

  • Options for employers with business locations in more than one state:
    • Employers can purchase coverage through one State-based Marketplace (primary business location) or apply separately in multiple SHOPs where they have work locations.
    • Agents can assist an employer in determining if employees have access to national provider networks when an employer with business operations and employees in multiple states is considering the single SHOP option.

Step 2:
Next, agents may help the employer input an employee roster with basic information about each employee.

  • The employer must include all full-time employees on payroll on this roster.
  • Only employees on this roster will be eligible to enroll in SHOP coverage.
  • If an employer offers affordable coverage to an employee, the employee is ineligible for premium tax credits in the Individual Marketplace. Employer-sponsored insurance is considered unaffordable if an employee’s share of the self-only coverage is more than 9.5% of the worker’s household income. Because employers will not know their employees’ household income, the Internal Revenue Service (IRS) has proposed regulations which include several affordability safe harbors.

Step 3:
After all the information is entered by the employer, SHOP will generate information about the range of premiums for all plans, and, at the employer’s request, detailed descriptions of specific plans at different price points.  In 2014, employers can provide health insurance coverage to their employees by offering a single qualified health plan (QHP) option.

Step 4:
After the employer selects one QHP, that QHP will be the default “reference plan.”

Step 5:
Once the employer has selected a reference plan, they choose a defined percentage of the reference plan to contribute for each employee. The employer also decides if and at what percentage they will contribute towards dependent and dental coverage. (Employer contributions to dependent insurance coverage and dental coverage continue to be optional under the Affordable Care Act.).  Employers will review average plan premiums based on the ages of employees likely to enroll in coverage; after a reference plan is chosen, the employer will decide on a percentage contribution for that reference plan.

  • Step 6:
    Next, the employer decides whether all employees will contribute the same amount for coverage or will pay a premium based on age.

    • The option to charge younger employees lower premiums for a given level of coverage may help attract younger individuals into the risk pool and may help employer groups meet any minimum participation rates. This option also results in higher premium contributions by older employees, who are also more likely to incur higher out-of-pocket costs.
    • Calculate defined contributions as follows:
      • There are two options for an employer to calculate defined contribution:
        • An employer may choose to set the employee contribution as a percentage of the underlying cost of the employee’s coverage. Under this option, older employees would make higher contributions toward coverage, reflecting their higher risk and permissible rate variation based on age. Younger employees would make lower contributions, which may improve the perceived value of insurance for these employees and increase participation rates, making it easier for the employer to meet any minimum participation rate requirement that may apply
        • An employer may choose a contribution method in which every employee pays a fixed amount for employee coverage under the reference plan. Contributions for dependents will always be based on the underlying costs of coverage.
        • Described in terms of the choices the employer makes, the key question is whether to choose an age-adjusted contribution or have all employees pay the same for the health plan.

    Step 7:
    The employer views a summary of choices and has an opportunity to explore “what if” scenarios:

    • Agents can help employers consider the effect on each of their employees if they choose a different reference plan, a different employer contribution percentage, or a different employee contribution method.

    Step 8:
    Agents can also help each eligible employee enroll in a SHOP.

    • For the employer to be able to offer coverage to employees, at least 70% of the total number of employees must participate and sign up for coverage (excluding employees who have other creditable coverage, such as another group plan or public health insurance).
    • For agents to be able to assist employees, they will need to providethe agent information about themselves and any family members to be covered.
    • The employee chooses a plan (and decides whether to enroll dependents) based on net price after employer contribution.

    Step 9:
    The employer reviews the completed application. Agents can help the employer verify he or she has provided all the required information and met the minimum participation rate. Last, the employer establishes a waiting period policy for newly-eligible employees, and submits the first month’s premium.

    QHP Billing and Payment in the Federally-facilitated SHOP

    During the first plan year, 2014, the QHP issuer will be responsible for all billing and the employer will pay premiums to the QHP issuer directly.

    Making Changes after Initial Enrollment

    • Any changes after initial enrollment will be made by the employer or employee through their My Account.
    • Employees who leave employment must be deleted from the roster and newly-eligible or newly-hired employees must be added to the roster through the employer’s My Account.
    • Newly-eligible or newly-hired employees must then complete an employee application, available on their My Account.
    • Changes in the employee’s coverage (such as address changes, addition of new dependents due to birth or adoption, and plan changes during special enrollment periods [SEP]) are made through the employee’s My Account.

Next Topic: Employees Enrollment in a SHOP

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