900 KAR 10:020. KHBE
Small Business Health Options Program.
RELATES TO: KRS 194A.050(1), 42 U.S.C.
18031, 45 C.F.R. Parts 155, 156
STATUTORY AUTHORITY: KRS 194A.050(1)
NECESSITY, FUNCTION, AND CONFORMITY: The
Cabinet for Health and Family Services, Kentucky Office of Health Benefit and
Information Exchange, has responsibility to administer the state-based American
Health Benefit Exchange. KRS 194A.050(1) requires the secretary of the cabinet
to promulgate administrative regulations necessary to protect, develop, and
maintain the health, personal dignity, integrity, and sufficiency of the
individual citizens of the Commonwealth; to operate the programs and fulfill
the responsibilities vested in the cabinet; and to implement programs mandated
by federal law or to qualify for the receipt of federal funds. This
administrative regulation establishes the policies and procedures relating to
the operation of a Small Business Health Options Program in accordance with 42
U.S.C. 18031 and 45 C.F.R. parts 155 and 156.
Section 1. Definitions. (1)
"Agent" is defined by KRS 304.9-020(1).
(2) "Annual open enrollment
period" is defined by 45 C.F.R. 155.410(e).
(3) "Annual renewal date" means
the date following twelve (12) months from the first day of the first coverage
month and every twelve (12) months thereafter.
(4) "Children’s Health Insurance
Program" or "CHIP" is defined by 42 C.F.R. 457.10.
(5) "COBRA" means continuation
of coverage under 29 U.S.C. Part 6.
(6) "Department of Health and Human
Services" or "HHS" means the U.S. Department of Health and Human
Services.
(7) "Employer identification
number" means a unique numerical identifier which is used to identify a
business, partnership, or other entity.
(8) "Full-time employee" is
defined by 45 C.F.R. 155.20.
(9) "Full-time equivalent
employee" means the number of employees determined by using the method set
forth in section 4980H(c)(2) of the Internal Revenue Code, 26 U.S.C.
4980H(c)(2).
(10) "Group participation rate"
means the minimum percentage of all eligible individuals or employees of an
employer that is required to be enrolled.
(11) "Health plan" is defined
by 42 U.S.C. 18021(b)(1).
(12) "Indian" is defined by 25
U.S.C. 450b(d).
(13) "Initial open enrollment
period" means the enrollment period in which a qualified employer first
enrolls in coverage through the Small Business Health Options Program (SHOP).
(14) "Kentucky Health Benefit
Exchange" or "KHBE" means the Kentucky state-based exchange
approved by HHS pursuant to 45 C.F.R. 155.105 to offer a QHP or stand-alone
dental plan (SADP), that includes an:
(a) Individual exchange; and
(b) Small Business Health Options
Program.
(15) "Kentucky Health Insurance
Premium Payment Program" or "KHIPP" means a Kentucky Medicaid
program that pays the costs of some or all of the employee portion of
employer-sponsored health insurance premiums.
(16) "Kentucky Office of Health
Benefit and Information Exchange", "KOHBIE", or
"office" means the office created to administer the Kentucky Health
Benefit Exchange.
(17) "Medicaid" means coverage
in accordance with Title XIX of the Social Security Act, 42 U.S.C. sections
1396 et seq. as amended.
(18) "Metal level of coverage"
means health care coverage provided within plus or minus two (2) percentage
points of the full actuarial value as follows:
(a) Bronze level with an actuarial value
of sixty (60) percent;
(b) Silver level with an actuarial value
of seventy (70) percent;
(c) Gold level with an actuarial value of
eighty (80) percent; and
(d) Platinum level with an actuarial
value of ninety (90) percent.
(19) "Minimum essential
coverage" is defined by 26 C.F.R. 1.5000A-2.
(20) "Newly qualified employee"
means an employee who becomes eligible to participate in the employer’s group
health plan outside of a qualified employer’s initial or annual enrollment
period.
(21) "Plan year" means a
consecutive twelve (12) month period during which a health plan provides
coverage for health benefits.
(22) "Premium" is defined by
KRS 304.14-030.
(23) "Qualified employee" means
an individual employed by a qualified employer who has been offered health
insurance coverage by the qualified employer through the SHOP.
(24) "Qualified employer" means
an employer that elects to make, at a minimum, all full-time employees of the
employer eligible for one (1) or more QHPs in the small group market offered
through the SHOP.
(25) "Qualified Health Plan" or
"QHP" means a health plan that meets the standards described in 45
C.F.R. 156 Subpart C and that has in effect a certification issued by the
office.
(26) "Qualifying event" means
an event that triggers a special enrollment period for an individual to enroll
in health insurance coverage.
(27) "Reference plan" means a
single health plan on which an employer will base its employee premium
contribution and an employee is then able to select the reference plan, or if
the employee selects another health plan, the employee shall pay the premium
differential between the selected health plan and the reference plan.
(28) "SHOP" means a Small Business
Health Options Program operated by the KHBE through which a qualified employer
can provide a qualified employee and the employee's dependents with access to
one (1) or more QHPs or SADPs.
(29) "Small employer" means for
a plan year beginning:
(a) Before January 1, 2016, an employer
who employed an average of fifty (50) or fewer full-time employees on business
days during the preceding calendar year; or
(b) On or after January 1, 2016, an
employer who employed an average of at least one (1) but no more than 100
full-time equivalent employees on business days during the preceding calendar
year and who employs at least one (1) employee on the first day of the plan
year.
(30) "Special enrollment
period" means a period during which a qualified employee who experiences
certain qualifying events may enroll in, or change enrollment in, a QHP through
the KHBE outside the initial and annual open enrollment periods.
(31) "Stand-alone dental plan"
or "SADP" means a dental plan as described by 45 C.F.R. 155.1065 that
has been certified by the office to provide a limited scope of dental benefits
as defined in 26 U.S.C. 9832(c)(2)(A), including a pediatric dental essential
health benefit.
(32) "TRICARE" means the
Department of Defense administered health care program serving active uniformed
service members, retirees, and their families.
(33) "Waiting period" means the
period before coverage for an employee or dependent who is otherwise eligible
to enroll under the terms of a group health plan can become effective.
Section 2. Employer Eligibility. (1) An
employer shall be a qualified employer and eligible to purchase coverage
through SHOP if the employer:
(a) Meets the eligibility requirements
established in 45 C.F.R. 155.710(b);
(b) Has a valid federal employer
identification number;
(c) Has at least one (1) common law
employee that shall not include an individual described in 29 C.F.R.
2510.3-3(c); and
(d) Except as provided in 45 C.F.R.
147.104(b)(1)(i) and subsection (2) of this section:
1. Meets a group participation rate of at
least seventy-five (75) percent that shall be calculated in accordance with
subsection (6) of this section; and
2. Contributes a minimum of fifty (50)
percent toward the QHP premium of any qualified employee in accordance with
Section 6 of this administrative regulation.
(2) A small employer may elect to offer
SADP coverage to only its full-time employees.
(3) A small employer participating in
more than one (1) SHOP and meeting the criteria in subsection (1) of this
section shall offer coverage to its full-time employees whose primary work site
is in Kentucky.
(4) An employer shall apply to enroll in
a QHP or SADP:
(a) Via the internet at
www.kynect.ky.gov;
(b) By telephone by contacting the office
contact center at 1-800-459-6328; or
(c) In person.
(5) If the information submitted by a
small employer is inconsistent with the eligibility standards in this section,
the employer shall have thirty (30) days after a notification of the
inconsistency to present documentation to support the employer’s application or
resolve the inconsistency.
(6) An employee participation rate shall
be calculated:
(a) As the number of qualified employees
accepting medical coverage under the employer’s group health plan plus the
number of qualified employees enrolled in other medical coverage as described
in subsection (7) of this section divided by the number of qualified employees
offered medical coverage; and
(b) At the time the employer submits the
SHOP group enrollment.
(7) Other medical coverage shall include:
(a) Another employer’s plan;
(b) Medicare;
(c) Medicaid;
(d) TRICARE;
(e) Other coverage identified in 45
C.F.R. 156.602; or
(f) Coverage recognized by HHS as meeting
the requirement for minimum essential coverage under 45 C.F.R. 156.604.
(8) If a small employer’s group
participation rate falls below the requirement in subsection (1)(d) of this
section during a plan year, the qualified small employer shall be eligible to
participate in the SHOP through the remainder of the plan year.
(9) A qualified employer who ceases to be
a small employer by reason of an increase in the number of employees shall be
eligible to participate in SHOP until the employer:
(a) Fails to otherwise meet the
eligibility criteria of this section; or
(b) Chooses to no longer purchase health
coverage through the SHOP.
Section 3. Employee Eligibility. (1) An
employee shall be a qualified employee eligible to enroll in a QHP or SADP
through the SHOP if the employee receives an offer of coverage from a qualified
employer.
(2) A qualified employee shall be
eligible to enroll a dependent or spouse in a QHP through SHOP if the offer of
coverage from a qualified employer includes an offer of dependent or spousal
coverage and the qualified employee is enrolled in the QHP.
(3) A qualified employee shall be able to
enroll a dependent or spouse in an SADP if the offer of coverage from a
qualified employer includes an offer of dependent or spousal coverage in an
SADP; and
(a) The qualified employee is enrolled in
an SADP; or
(b) If the qualified employee is not
enrolled in an SADP, only a spouse or dependent of the qualified employee up to
twenty-one (21) years of age may enroll in an SADP.
(4) A qualified employee who is enrolled
in an SADP shall enroll a dependent or spouse in an SADP if:
(a) The offer of coverage from a
qualified employer includes an offer of dependent or spousal coverage in an
SADP; and
(b) The dependent or spouse is three (3)
years of age up to twenty-one (21) years of age.
(5) If the offer of coverage from a
qualified employer includes an offer of stand-alone dental coverage, a
qualified employee up to twenty-one (21) years of age who is not otherwise
enrolled in dental coverage shall enroll in an SADP.
(6) An employee shall apply to enroll in
a QHP or SADP:
(a) Via the internet at
www.kynect.ky.gov;
(b) By contacting the office contact
center at 1-800-459-6328; or
(c) In person.
(7) If the information submitted by an
employee is inconsistent with the eligibility standards in this section, the
employee shall have thirty (30) days after a notification of the inconsistency
to present documentation to support the employee’s application or resolve the
inconsistency.
(8) A qualified employee who does not
want to enroll in a QHP offered by a qualified employer shall waive coverage.
(9) A qualified employee waiving coverage
shall:
(a) Wait until the next annual open
enrollment period, pursuant to Section 10 of this administrative regulation, to
enroll in coverage; or
(b) If the employee experiences a
qualifying event, enroll during a special enrollment period pursuant to Section
12 of this administrative regulation.
Section 4. Employer Participation
Requirements. (1) A qualified employer shall submit the following information
to the SHOP:
(a) An employee census that includes the
name, address, birth date, and social security number of a qualified employee;
(b) If offering dependent or spousal
coverage, the name, address, and birth date of the dependent or spouse;
(c) General employer information that
shall include the:
1. Business legal name;
2. Primary business address; and
3. Federal employer identification
number;
(d) The number of qualified employees and
the total number of employees employed by the qualified employer;
(e) Whether the employer shall offer
dependent or spousal health coverage;
(f) The name and primary phone number for
the primary contact for the qualified employer; and
(g) Whether the employer has an agent or
kynector, and if so, the name of the agent or kynector.
(2) A qualified employer shall provide
the SHOP:
(a) A copy of its most recently filed
Employer's Quarterly Unemployment Wage and Tax Report, if applicable; or
(b) If in business for less than three
(3) months, a copy of a business filing with the Kentucky Secretary of State.
Section 5. Employer Selection of
Qualified Health Plans. (1) A qualified employer shall make available to a
qualified employee:
(a) A single QHP;
(b) All available QHPs at a single metal
level of coverage;
(c) If metal levels are contiguous, one
(1) or more QHPs at more than one (1) metal level of coverage; or
(d) All available QHPs from one (1) or
more issuer.
(2) Unless each QHP offered to a
qualified employee has an embedded pediatric dental benefit, a qualified
employer shall make available to a qualified employee at least one (1)
pediatric stand-alone dental plan.
Section 6. Minimum Contribution. (1) A
small employer who selects only one (1) QHP to offer to a qualified employee in
accordance with Section 5 of this administrative regulation shall:
(a) Define a percentage contribution of
at least fifty (50) percent toward the premium for employee-only coverage under
the QHP, except as provided for in 45 C.F.R. 147.104(b)(1)(i); and
(b) Apply the employer contribution determined
in paragraph (a) of this subsection toward the QHP selected by the employee.
(2) A small employer who selects more
than one (1) QHP to offer to a qualified employee in accordance with Section 5
of this administrative regulation shall:
(a) Apply the employer contribution
determined in accordance with subsection (1)(a) of this section to the QHP
selected by an employee; or
(b) If a reference plan is selected by
the employer, make a percentage contribution of at least fifty (50) percent
toward the premium for employee-only coverage under the reference plan.
(3) An employer who elects to provide
dependent or spousal coverage may make a contribution toward a premium for
dependent or spousal coverage.
(4) An employer who elected to provide
coverage for an SADP may make a contribution toward a premium for:
(a) Employee coverage; or
(b) Employee coverage and dependent or
spousal coverage.
Section 7. Employer Selection of Coverage
Period. (1) Subject to subsection (2) of this section, a qualified employer
shall elect to offer health insurance coverage through the SHOP for a qualified
employee at any time during the calendar year after:
(a) Submitting the information required
in Section 4 of this administrative regulation;
(b) Selecting a QHP or QHPs to offer to
qualified employees as provided in Section 5 of this administrative regulation;
and
(c) Meeting the minimum contribution
requirement in Section 6 of this administrative regulation.
(2) If a qualified employer fails to meet
the minimum participation rate specified in Section 2(1)(d) of this
administrative regulation or the minimum contribution requirement specified in
Section 6 of this administrative regulation, the qualified employer may elect
to offer coverage to a qualified employee during an enrollment period from
November 15 through December 15 of each year.
(3) A qualified employer may apply for
coverage through the SHOP for its qualified employees at any time during the
year.
(4) A qualified employer’s plan year
shall be a twelve (12) month period beginning on the coverage effective date
for its qualified employees.
(5) A qualified employer shall not change
its offer of coverage to its qualified employees after a qualified employee has
made a QHP selection during an initial or annual open enrollment period.
Section 8. Enrollment Periods for a
Qualified Employee. (1) A qualified employee shall enroll in a QHP or SADP or
change a QHP or SADP only during:
(a) An initial open enrollment period
described in this section;
(b) For a newly qualified employee, an
enrollment period described in Section 11 of this administrative regulation;
(c) An annual open enrollment period
described in Section 10 of this administrative regulation; or
(d) A special enrollment period described
in Section 12 of this administrative regulation.
(2) An initial open enrollment period
shall:
(a) Begin on a day chosen by the employer
if the employer has provided the information required in Section 4 of this
administrative regulation;
(b) Be a minimum of ten (10) days; and
(c) End on the tenth day of a calendar
month.
(3) An effective date of coverage for a
qualified employee enrollment during an initial open enrollment period shall be
the first day of the month following the end of the open enrollment period.
(4) Unless an employee
changes coverage due to a qualifying event, a premium shall not change until
the employer’s annual renewal date.
Section 9. Annual Employer Election
Period. (1) On an annual basis, a small employer shall have a thirty (30) day
period prior to the completion of the employer’s plan year and before the
annual open enrollment to change the employer’s participation in the SHOP for
the next plan year.
(2) During the employer annual election
period, a small employer may change:
(a) Its employer contribution towards the
premium of a qualified employee made in accordance with Section 6 of this
administrative regulation;
(b) The QHP or QHPs offered to a
qualified employee in accordance with Section 5 of this administrative
regulation;
(c) The SADP or SADPs offered to a
qualified employee in accordance with Section 5 of this administrative
regulation;
(d) Its election to offer dependent or
spousal coverage; and
(e) The waiting period for newly
qualified employees.
Section 10. Annual Open Enrollment
Period. (1) A qualified employee shall select a QHP or change a QHP during an
annual open enrollment period that shall be:
(a) No less than thirty (30) days; and
(b) Prior to the end of the employer’s
plan year.
(2) If a qualified employee enrolled in a
QHP remains eligible for coverage, the qualified employee shall remain enrolled
in the QHP selected the previous year unless:
(a) The qualified employee enrolls in
another QHP; or
(b) The QHP is no longer available to the
qualified employee.
Section 11. Enrollment Period and
Coverage Effective Dates for a Newly Qualified Employee. (1) A newly qualified
employee shall be eligible for an enrollment period beginning on the first day
of becoming a newly qualified employee, regardless of whether the employee is
subject to a waiting period.
(2) An enrollment period for a newly
qualified employee shall be at least thirty (30) days.
(3) If a newly qualified employee is
subject to a waiting period in excess of forty-five (45) days, the duration of
the employee’s enrollment period shall extend until fifteen (15) days before
the conclusion of the waiting period.
(4)(a) Except as provided in paragraph
(b) of this subsection, an effective date of coverage for a newly qualified
employee shall be:
1. On the first day of the month; and
2. Subject to an effective date of
coverage determined in accordance with subsection (5) of this section.
(b) If subject to a waiting period
consistent with 45 C.F.R. 147.116, the effective date of coverage may be on the
first day of a later month if the effective date complies with 45 C.F.R.
147.116.
(5) The effective date of coverage shall
be:
(a) For a plan selection made between the
first and the fifteenth of any month, the first day of the following month; or
(b) For a plan selection made between the
sixteenth and the last day of any month, the first day of the following second
month.
Section 12. Special Enrollment Period.
(1) A qualified employee, dependent of a qualified employee, or spouse of a
qualified employee may enroll in a QHP or an SADP or a qualified employee,
dependent of a qualified employee, or spouse of qualified employee may change a
QHP or an SADP during a special enrollment period if:
(a) The qualified employee or the spouse
or dependent of a qualified employee loses minimal essential coverage;
(b) The qualified employee gains a spouse
or dependent through marriage, birth, adoption, or placement for adoption;
(c) The qualified employee or the spouse
or dependent of the qualified employee enrolls or fails to enroll in a QHP due
to an error, misrepresentation, or inaction of an officer, employee, or agent
of the KHBE;
(d) The qualified employee or the spouse
or dependent of the qualified employee demonstrates to the KHBE that the QHP in
which the qualified employee or the spouse or dependent of the qualified
employee is enrolled substantially violated a material provision of its
contract in relation to the enrollee;
(e) The qualified employee or the spouse
or dependent of the qualified employee gains access to new QHPs as a result of
a permanent move;
(f) The qualified employee or the spouse
or dependent of the qualified employee demonstrates that the qualified employee
or the spouse or dependent of an employee meets other exceptional circumstances;
(g) The qualified employee is an Indian
who may change from one (1) QHP to another QHP one (1) time per month;
(h) The qualified employee or the spouse
or dependent of the qualified employee loses eligibility for coverage under
Medicaid or CHIP; or
(i) The qualified employee or the spouse
or dependent of a qualified employee becomes eligible for premium assistance
through KHIPP.
(2) A qualified employee or the spouse or
dependent of a qualified employee shall have thirty (30) days from the date of
a triggering event described in subsection (1)(a) through (g) of this section
to select a QHP or SADP through the SHOP.
(3) A qualified employee or the spouse or
dependent of a qualified employee shall have sixty (60) days from the date of a
triggering event described in subsection (1)(h) or (i) of this section to
select a QHP or SADP through the SHOP.
(4) A spouse or dependent of a qualified
employee shall not be eligible for a special enrollment period if a small
employer does not offer coverage to a spouse or dependent.
(5) Except as provided in subsection (6)
of this section, the effective date of coverage for an enrollment during a
special enrollment period shall be, if a qualified employee selects a QHP:
(a) Between the first and the fifteenth
day of any month, the first day of the following month; or
(b) Between the sixteenth and the last
day of any month, the first day of the second following month.
(6)(a) For a birth, adoption, or
placement for adoption, the effective date of coverage shall be the date of
birth, adoption, or placement for adoption.
(b) For a marriage, or if a qualified
employee loses minimum essential coverage as described in subsection (7) or (8)
of this section, the effective date of coverage shall be the first day of the
following month.
(7) Loss of minimum essential coverage
shall include those circumstances described in 26 C.F.R. 54.9801–6(a)(3)(i)
through (iii).
(8) Loss of minimum essential coverage
shall not include termination or loss due to:
(a) Failure to pay premiums on a timely
basis, including premiums prior to expiration of COBRA coverage; or
(b) A situation allowing for a rescission
as specified in 45 C.F.R. 147.128.
Section 13. Effective Dates for
Cancellation of Coverage. (1) Except for the death of an employee or dependent
or spouse of an employee, the effective date for cancellation of coverage shall
be:
(a) The last day of the month during
which an employer terminates an employee’s or dependent or spouse of an
employee’s coverage; or
(b) The last day of the month in which an
employee requests to terminate the employee's own or the dependent’s or
spouse’s coverage.
(2) The effective date for cancellation
of coverage for the death of an employee or dependent or spouse of an employee
shall be the date of death.
Section 14. Employer Voluntary and
Involuntary Termination from SHOP. (1)(a) An employer may terminate its
participation in SHOP at any time and for any reason by providing written
notice to KHBE.
(b) The earliest effective date of
termination shall be:
1. The last day of any calendar month if
the employer has given notice to the SHOP on or before the fifteenth of any
month; or
2. The last day of the following calendar
month if notice was given after the fifteenth of any month.
(2) An employer may be terminated from
participation in SHOP if the employer:
(a) Fails to meet the minimum
contribution requirements established in Section 4 of this administrative
regulation;
(b) Fails to meet the employer
eligibility requirements established in Section 2 of this administrative
regulation;
(c) Fails to pay the total premium due
within the grace period described in KRS 304.17A-243; or
(d) Commits fraud or misrepresentation.
(3) The effective date of employer
termination from participation in the SHOP shall be:
(a) The date of notification of
termination for failure to meet minimum contribution requirements under
subsection (2)(a) of this section;
(b) The last day of the plan year, if the
condition in subsection (2)(b) of this section is met;
(c) The last day of the month in which
premiums were paid in full, if the condition in subsection (2)(c) of this
section is met; or
(d) The last day of the calendar month
following the month in which an employer shall be notified of the termination
by the KHBE, if the condition in subsection (2)(d) of this section is met.
(4) Coverage terminated under subsection
(2)(c) of this section for nonpayment of premium shall be reinstated upon
request of the employer one (1) time during a plan year if the employer:
(a) Requests reinstatement by the end of
the month following the month of termination; and
(b) Pays all premiums:
1. From the month of termination through
the month reinstatement is requested; and
2. For the month following the request
for reinstatement.
(5) If coverage is reinstated pursuant to
subsection (4) of this section, there shall be no lapse in coverage. (40 Ky.R. 199; 868; eff.
12-10-2013; 41 Ky.R. 2658; 42 Ky.R. 301; eff. 9-4-2015.)
