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Small Business Health Options Program (SHOP) FAQ

Guidance for FAQ regarding 834 Transaction and Cancellation Transaction

Program Area: Small Business Health Options Program (SHOP)

Question: It is understood that issuers may pend claims prior to receipt of a group's initial binder payment from the Federally-facilitated Small Business Health Options Program (FF-SHOP) (subject to allowable state laws and regulations). If a group defers paying its initial binder payment, can the issuer hold the processing of the enrollment transactions (the XML/834) until it receives the initial binder payment from the Centers for Medicare & Medicaid Services (CMS)? Or must the issuer immediately proceed with processing the XML/834 and rely on CMS to convey any applicable cancelation transaction?

Answer: Per Section 156.285(c)(7)(iii), issuers participating in FF-SHOP Marketplaces are required to effectuate SHOP coverage unless the issuer receives a cancellation transaction prior to the coverage effective date. Cancellation transactions will be sent to issuers by the 26th of the month if the FF-SHOP does NOT receive the initial binder payment prior to the coverage effective date. CMS expects that some issuers will hold off on effectuating coverage until after this cancellation window has passed or until the issuer receives the initial binder payment from the FF-SHOP (prior to the cancellation window passing).

Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: June 26, 2014

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