Managers of President Donald Trump's Centers for Medicare &Medicaid Services are hoping that, if the program still exists nextyear, insurance agents and brokers will help solve a major problem:HealthCare.gov has a puny Small BusinessHealth Options Program division.

|

The U.S. Department of Health and Human Services, the parent ofCMS, set up HealthCare.gov under former President BarackObama, to provide Affordable Care Act public exchange services instates that were unable or unwilling to do the job themselves.

|

HealthCare.gov now runs the SHOP division for 33states. Officials at Obama's CMS always avoided answeringquestions about HealthCare.gov SHOP enrollment.

|

Trump's CMS officials have now revealed the 2017 SHOP enrollmentnumber, in a new notice announcing a SHOP overhaulproposal.

|

HealthCare.gov started 2017 with just 7,600 employer clients inall of the 33 states it serves. Those 7,600 employers are coveringjust 39,000 people through their SHOP plans, or fewer than sixpeople per plan, according to CMS figures.

|

Uncertainty about the future of the Affordable CareAct may have hurt 2017 SHOP sales. It's possible that the 2016enrollment numbers were better than the 2017 numbers. Any defendersof the Obama administration's SHOP program will have trouble makingthat case, however, because Obama's CMS never released 2016enrollment numbers. The new SHOP numbers appear to be the first CMShas ever released, aside from some very rough, incomplete estimatesburied in paperwork burden review notices.

|

The low 2017 HealthCare.gov SHOP enrollment numbers show thatCMS has to change the way the SHOP division works, CMS officialssay.

|

In the HealthCare.gov states, "SHOP programs are now defunct anddo not provide needed insurance coverage for small businesses,"officials say.

|

CMS officials say they want to revive the HealthCare.gov SHOPdivision by giving up on efforts to have small employers enroll incoverage online. Officials hope to turn almost all responsibilityfor setting up SHOP plans, enrolling workers in the plans, andadministering the plans over to insurers, agents and brokers.

|

The HealthCare.gov website would still determine whether a smallemployer was eligible for the Affordable Care Act Small BusinessHealth Care Tax Credit subsidy, but private companies would do justabout everything else.

|

Seema Verma, the CMS administrator, says in a statement that thegoal of the proposal was to reduce burdens on small-businessowners.

|

"This new direction will help employers find affordable healthcare coverage for their employees and make the SHOP exchangefunction more effectively," Verma says.

|

The proposed changes would have a direct effect only on the 33states that use HealthCare.gov to run their SHOP divisions.

|

The jurisdictions with locally run SHOP exchange divisions haveposted mixed SHOP enrollment results.

|

The District of Columbia and Vermont have high SHOP enrollmentnumbers because they require small groups to get new, fully insuredhealth coverage through their locally run ACA exchange program SHOPdivisions, even if those groups also use agents, brokers orbenefits consultants. Some other states with state-based exchanges,including California and Connecticut, have also achievedrespectable SHOP enrollment numbers.

|

Other states have had trouble with their SHOP divisions.Managers of Nevada's exchange reported in April 2015that, earlier in the year, the state's SHOP exchangedivision was providing coverage for just seven people.

|

The new CMS SHOP enrollment numbers imply that jurisdictionswith their own locally based ACA exchange programs serve 19,400SHOP plan sponsors and about 191,000 SHOP plan enrollees.

|

Members of the Trump administration and Republicans in Congressare trying to repeal and replace the ACA. Successful efforts tochange the ACA could kill the ACA exchange system. For now,however, officials at Trump's CMS are operating under the principlethat the ACA is still the law of the land, and that they must dotheir best to make the exchange system work.

|

CMS has been continuing to run the ACA individual andsmall-group risk-adjustment programs in about the same way it wasrunning them under Obama. The agency recently completed work on acollection of individual exchange stabilization measures, includinga move to tighten the documentation standards for consumers who areapplying for permission to buy coverage outside the usual openenrollment period.

|

If the current ACA rules stay in effect in 2018, CMS needs tokeep some version of the SHOP system alive to give small employersaccess to the ACA Small Business Health Care Tax Credit.

|

The ACA requires employers with the equivalent of at least 50full-time employees to offer the full-time workers major medicalcoverage oor face the risk of having to pay a penalty. Smallemployers do not have to meet the ACA "employer sharedresponsibility" requirements.

|

The ACA also created the individual public exchange program andthe individual exchange user premium tax credit subsidyprogram.

|

ACA drafters put the Small Business Health Care Tax Credit in tokeep small employers from dropping their coverage and sending theworkers to the individual exchange.

|

When ACA rules and programs came to life, small employers didnot rush to drop their coverage, but enrollment did not stabilizeeither. Enrollment continued to drop at about the same rate. Thenew tax credit did little to increase small-group health insurancesales, partly partly because qualifying for the tax credit hasturned out to be difficult.

|

To enlist brokers in efforts to turn the HealthCare.govsmall-group division around, Trump's CMS will have to wrestle witha problem it inherited from the Obama administration: a history ofrefusing to help agents and brokers get paid.

|

Early on, CMS officials said they wanted to work with agents andbrokers. CMS then did nothing to help agents and brokers collectenrollment fees from 2011 through 2013, when it was in charge of atemporary ACA Pre-existing Condition Insurance Plan program forpeople with health problems.

|

When HealthCare.gov opened, CMS said issuers had to pay the samecommissions for plans sold through HealthCare.gov and similar planssold outside the exchange system, but CMS never set minimumcommissions standards, and it never helped agents and brokerscollect the commissions that exchange plan issuers had alreadypromised to pay them.

|

Managers at some locally run exchanges have been far more activeat speaking up for brokers. Covered California, for example, hasset minimum exchange plan commission standards.

|

In the new notice, CMS makes no mention of any campaigns topersuade issuers to offer minimum commission levels, or to pushissuers to pay the commissions agents and brokers have alreadyearned.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Allison Bell

Allison Bell, ThinkAdvisor's insurance editor, previously was LifeHealthPro's health insurance editor. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at [email protected] or on Twitter at @Think_Allison.