Small Business Health Options Program (“SHOP”)

The Affordable Care Act (ACA) required each state to establish an online competitive marketplace where, beginning in 2014, individuals and small businesses would be able to purchase health insurance. The Small Business Health Options Program (SHOP) is the marketplace component for small businesses.

The Department of Health and Human Services (HHS) operates a federally-facilitated marketplace (FFM) in each state that did not establish its own marketplace. The SHOP component of the FFM is known as the FF-SHOP.  Pennsylvania, New Jersey, and Delaware each deferred to the federal government to implement FF-SHOPs.

The ACA requires each SHOP to provide the “employee choice model,” in which the employer chooses a level of coverage and a contribution amount and employees then select any plan at that level available on the SHOP.  The requirement to offer the employee choice model, however, was previously delayed until 2015.

On June 10, 2014, HHS released a list of FF-SHOP states where the employee choice model would be further delayed, pursuant to an HHS policy announced earlier this year.  In total, 18 states with an FF-SHOP (including Pennsylvania, New Jersey, and Delaware) will not be providing the employee choice mode in 2015.  Employers in these states will be able to offer employees a single health plan and a single dental plan through the SHOP Marketplace.