Federal Agencies Propose Changes to SHOP Exchanges

SHOP Exchange Notice Electronic Delivery Proposal
Subject to federal or state law, the agencies propose that electronic notices be the default method for sending required SHOP Exchange notices. This proposal would make mailed paper notices optional, at the election of the employer or employee, as applicable.

Proposed Changes to SHOP Enrollment and Waiting Periods
The proposed rule would alter the SHOP Exchange enrollment period regulations by:

  • Requiring SHOP Exchanges to provide an employee who becomes a qualified employee outside of the initial or annual open enrollment period with a 30-day enrollment period that begins on the date the qualified employer notifies the SHOP about the newly qualified employee; and
  • Specifying that the coverage effective date for a newly qualified employee be the first day of the month following the plan selection, unless the employee is subject to a waiting period.

The proposal also changes requirements for employers participating in a SHOP Exchange in two important ways. First, employers would be required to notify the SHOP Exchange about a newly qualified employee on or before the 30th day after the day that the employee becomes eligible for coverage. Second, for employers with variable hour employees that regularly make having a specified number of hours of service per period (or working full-time) a condition of employee eligibility for coverage offered through a SHOP Exchange, any measurement period that the employer uses to determine eligibility must not exceed 10 months with respect to coverage offered through a SHOP Exchange.

The agencies are also proposing to limit waiting periods in a SHOP Exchange to 60 days, beginning on the date the employee becomes eligible—regardless of when the employer notifies the SHOP Exchange about the newly qualified employee.