Michigan opts in 2015 for No Employee Choice on SHOP

Michigan opts in 2015 for No Employee Choice on SHOP

In best interest, the state of Michigan decided against employee choice on the Small Business Health Options Program (SHOP) for 2015. State Insurance Commissioners were given an opportunity to submit a written recommendation to the SHOP that employee choice not be implemented in that state in 2015 if the State Insurance Commissioner determined that not implementing employee choice would be in the best interest of small group market consumers in his or her state.

Background: On May 27, 2014, the Department of Health and Human Services (HHS) issued a final rule taking the next step in implementing “employee choice” in the Small Business Health Options Program (SHOP).  “Employee choice” offers an employer the opportunity to allow employees to choose any health plan at the actuarial value, or “metal,” level selected by the employer.

Small business markets vary from state-to-state.  To ease the transition to employee choice, HHS provided states with additional flexibility by allowing State Insurance Commissioners to request that the SHOP in their state not implement employee choice in 2015.

For example, the No Employee Choice option is chosen if the State’s Insurance Commissioner determines that implementing employee choice would instigate issuers to price products and plans higher in 2015 due to issuers’ beliefs about adverse selection.  This transitional policy applies to 2015, as HHS expects that states and issuers will be able to learn from the experiences of issuers in those SHOPs that have decided to implement employee choice in 2015 to prepare for 2016. HHS is committed to implementing employee choice in a way that learns from early experience and ensures its success.

Insurance Commissioners in states with a Federally-facilitated SHOP were required to submit their recommendation letters to HHS by June 2, 2014.  Please see link below for a list of all states with a Federally-facilitated SHOP and provides information on whether each state will implement employee choice in 2015 or instead allow for transition relief.  

Link to all states decisions
Link to Michigan’s Insurance Commissioner decision

Please contact our government relations team with any questions at Bbochniak@michbusiness.org or by phone: (888) 277-6464 ext.401

Source: CMS.gov