SHOP Individual Alignment in Covered California
The Covered California health insurance marketplace must consider how closely aligned the qualified health plans (QHPs) should be between the SHOP and the Individual Exchange. The QHP alignment issues must address alignment of health plan issuers and alignment of benefit plan offerings.
Health Plan Issuers
The following options are being considered for alignment of health plan issuers between exchanges:
- Full alignment: Health plan issuers submit QHP applications to Covered California for participation in both individual and SHOP exchanges in the same geographic coverage regions, and contracts are only awarded to issuers that can serve both markets.
- Partial alignment: Health plan issuers submit applications for Covered California participation in both the individual and SHOP exchanges. However, the Covered California would permit health plans that only want to participate in one exchange on an exception basis.
- No required alignment: Health plans may participate in either Exchange.
At this point, it seeps likely that Covered California will follow staff recommendations for partial alignment for plans - Option 2 - to encourage plan issuer participation yet preserve reasonable exception for issuers only licensed for one but not both market segments. While the goal is to maintain reasonable consistency between the two exchanges, the market needs are slightly different and plan issuers will be more likely to participate in the exchange if permitted to provide some differentiation between the two exchanges.
The following options are available for the alignment of benefit plan offerings between exchanges:
- Full alignment: Benefit plan offerings would be identical in both exchanges.
- Partial alignment: Benefit plan offerings would generally be consistent in both exchanges, with the possibility of some differences to meet the needs of Individual and Small Group enrollees.
- No required alignment: Benefit plan offerings are unique to each Exchange.
At this point, it seems likely that Cover California will follow staff recommendations for partial alignment of benefits - Option 2 - relying on the ACA’s four-tiered metal structure and essential health benefit requirements to maintain alignment and continuity between individual and SHOP exchanges. Because the definition of essential health benefits must be identical across both markets, and the definition of actuarial value is the same, there is a limited range of variation that may be offered. The exception is in the area of provider network coverage, where issuers may wish to test innovative options on a smaller scale, and where that innovation may be stifled if it has to be implemented in both markets simultaneously. Consequently, some flexibility in alignment of benefit design offerings should be available.