PPACA included a number of provisions that changed requirements for small group health plans. For example, PPACA required that, beginning January 1, 2014, plans offer a set of minimum essential health benefits. PPACA also set standards for the percentage of total average costs that plans must cover for such benefits. The average costs covered by each plan are reflected in different plan levels, or tiers, and each tier is designated as bronze, silver, gold, or platinum. In addition, beginning on January 1, 2014, issuers are no longer able to consider the average health status of a particular group when setting premium rates and can only adjust premiums based on enrollment type (individual or family enrollment), geographic area, age, and tobacco use. Plans meeting these and other federal requirements, as well as other standards set by states, may be certified to be offered in an exchange; these plans are referred to as qualified health plans (QHPs). PPACA required all small group health plans to comply with these requirements as of January 1, 2014. However, in response to concerns regarding some issuers terminating plans that did not comply with PPACA requirements, CMS announced in November 2013 that it would provide transitional relief under which states could elect to permit issuers in their states to offer renewals of their noncompliant plans for a plan year beginning between January 1, 2014, and October 1, 2014, provided the plans met certain conditions. In March 2014, CMS extended this transitional policy through October 1, 2016, and noted that the agency may grant an additional 1 year extension, if necessary. PPACA also mandated the establishment of SHOPs in each state to allow small employers to compare available health insurance options in their states and facilitate the enrollment of their employees in coverage. Until 2016, states have the option to define small employers either as employers with 100 or fewer employees or employers with 50 or fewer To be eligible for SHOP coverage, a small employer must employees. offer coverage to all full-time employees in a QHP through a SHOP. To be eligible to enroll in a QHP through a SHOP, an individual must have been offered health insurance coverage by a qualified employer through a SHOP. Under PPACA, beginning in 2016, small employers will be defined in all states as those with 100 or fewer full-time equivalent employees. Beginning in 2017, states may allow issuers of health insurance coverage in the large group market—issuers offering coverage to groups of 101 or more full-time equivalent employees—to offer QHPs through the SHOP and, in turn, will allow large employers to obtain coverage through the SHOP. in the state by the participating issuers of health coverage. In addition, the benefits, cost-sharing features, and premiums of each QHP must be presented in a manner that facilitates comparison shopping of plans by small employers and their employees. Each SHOP must accept employer and employee applications through the SHOP website and may also accept applications over the phone, in person, or by mail. This application should collect the information necessary to screen an employer’s eligibility for SHOP participation and identify employees eligible to enroll in a QHP. Employers and employees may receive assistance to compare coverage options and complete applications through a qualified insurance agent or broker. In general, when offering coverage though a SHOP, employers select a plan, which becomes the employer's reference plan. Employers also decide the percentage they will contribute to the premiums for employees who select that plan, referred to as a defined contribution. Employees who have been offered a choice of plans are typically able to use the amount of the defined contribution for the reference plan when paying their premiums for a different SHOP plan. broader employee choices among multiple plans across different tiers. According to CMS, employee choice is intended to be a fundamental new benefit of SHOPs, in that small employers would be able to offer multiple plans from more than one issuer of health coverage, whereas traditionally most small employers have offered only one or a few plans from a single issuer. SHOPs were initially required to have the capacity to allow employers to provide employee choice beginning in 2014. However, under a final rule issued in June 2013, the requirement that SHOPs offer employee choice was first postponed to 2015, although SB-SHOPs retained the option of providing employee choice in 2014. The requirement was further postponed under a May 2014 final rule to 2016 in states that could demonstrate that postponing employee choice would be in the best interest of small employers and their employees and dependents, given the likelihood that implementing employee choice could cause issuers to price their products and plans higher than they would otherwise due to issuers’ beliefs about adverse selection. To provide an incentive for small employers to provide health insurance, and to make insurance more affordable, PPACA established a small business tax credit for certain eligible small employers offering coverage to their employees. The tax credit was available beginning in 2010, prior to the establishment of SHOPs. However, beginning in 2014, employers must offer coverage to their employees through the SHOP to be eligible for the credit. Beginning in 2014, employers are eligible for the credit for a maximum of 2 years. PPACA, § 1311(b)(1), 124 Stat. at 173 (codified at 42 U.S.C. § 18031(b)(1)). SHOPs and individual exchanges may change in future years. CMS officials stated that as of September 2014, Nevada was planning to begin using the FF-SHOP platform, while Idaho was planning to begin using its own state-based platform, in 2015. Though SHOPs were operational in all states as of June 1, 2014, many expected features were not yet available for a number of SHOPs. Enrollment for the SB-SHOPs, as of June 1, 2014 for most states, has been lower than expected, and CMS officials said they do not expect the enrollment trends for the FF-SHOPs to be significantly different, although they are still in the process of collecting enrollment data. Most SHOPs had multiple plans available in each county, though in some states there were a few counties with no plans available. Premiums varied across states, though were generally comparable to premiums for small group plans within the same state offered outside of the SHOPs. All of the FF-SHOPs and most of the SB-SHOPs were operational as required—that is, accepting enrollment applications—as of October 1, 2013. According to CMS, four of the SB-SHOPs—Hawaii, Maryland, Mississippi, and Oregon—were not operational as of the October 1, 2013, deadline, although all have since become operational. Hawaii became operational on October 15, 2013, Maryland became operational on April 1, 2014, and Oregon and Mississippi became operational on May 1, 2014. Websites where employers could review plan information, including premiums and benefits, were available on October 1, 2013, for all FF- SHOPs and most SB-SHOPs. This information allows employers and employees to make meaningful comparisons about available SHOP plans in their state. Plan information for the FF-SHOPs was provided by CMS through its website. According to CMS, on October 1, 2013, the SB- SHOPs in Maryland, Oregon, and Mississippi lacked websites where employers could review plan and premium information. Mississippi has since added plan and premium information to its websites. Oregon and Maryland have directed employers to contact agents and brokers or issuers to review plan options. According to CMS, most SB-SHOPs created online enrollment portals by October 1, 2013, though a handful of states—Maryland, Oregon, California, and Mississippi—did not have online enrollment portals available or had to take them offline, requiring employers to enroll directly through issuers. For example, the California SHOP initially offered online enrollment but took its enrollment portal down in February 2014 due to technical challenges, leaving small businesses in California able to enroll in SHOP plans only through direct enrollment. Online enrollment for the Mississippi SHOP began when it became operational in May 2014, while Maryland and Oregon have yet to implement online enrollment for their SHOPs. CMS did not implement online enrollment in the FF-SHOPs in 2014. As a result, employers enrolling in any of the FF-SHOPs, starting in October 2013, had to enroll in SHOP coverage either through agents and brokers or directly through issuers. CMS is currently preparing to implement online enrollment for the FF-SHOPs for 2015, and expects to launch online enrollment fully in all FF-SHOPs by November 15, 2014, when SHOP enrollment begins for 2015. The online enrollment system will allow, among other functions, enhanced features for agents and brokers, notification to employees of their employers’ annual open enrollment period, online employer payments, transmitting of enrollment and payment transactions to issuers, and the processing of coverage changes. According to CMS, fifteen SB-SHOPs offered employee choice in 2014 through a variety of approaches, though employee choice was delayed for the FF-SHOPs until 2015. These approaches included enabling employers to offer a choice of plans across all metal tiers and all issuers; a choice of plans across one metal tier but for multiple issuers; or a choice of plans from one issuer but across multiple metal tiers. Some states allowed the employer to choose which employee choice model to use, while other states only offered one approach. Four states, including California, required that employers offer their employees a choice of plans, while others, including Rhode Island and Kentucky, gave employers the option of choosing one plan or offering wider plan choice to their employees. The majority of enrolled employers in SB-SHOP states where data was available took advantage of the employee choice feature.