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SHOP Employer Contribution and Minimum Participation

The extent of an employers’ contributions to health insurance premiums make health care coverage affordable for employees or not. As the cost of healthcare has soared, generous premium contributions are becoming more difficult for employers. Employers who have historically offered comprehensive coverage with little or no employee contribution are increasingly looking at benefit plans that shift a higher share of costs to employees in the form of high deductibles, higher copays, and other benefit limiting features in exchange for lower premiums.

In a final rule published 3.27.13, the HHS ruled that small employers (less than 100 employees) cannot be denied guaranteed availability of coverage for failure to satisfy minimum participation or contribution requirements.

The carriers will continue set minimum contribution or group participation requirements beyond 1.1.14., but HHS says, “…in the case of a small employer that fails 
to meet contribution or minimum participation requirements, an issuer may limit its offering of coverage to an annual open enrollment period, which we set forth in this final rule as the period beginning November 15 and extending through December 15 of each year.

Generally, the group market will have continuous open enrollment, except for small employers that fail to meet contribution or minimum participation requirements, for which the enrollment period may be limited to the annual enrollment period described above, from November 15 through December 15. This approach addresses concerns about adverse selection.

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