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

Issue Date: September 17, 2014

Program Area: Small Business Health Options Program (SHOP)

Question: When an employee cancels plan selection and a cancellation transaction is sent at the subscriber-level, does this mean that the member's coverage was not effectuated?

Answer: Cancellation transactions are sent prior to the coverage effective date; however; this does not mean the FF-SHOP issuer did not receive the initial Group XML or 834 enrollment transactions for the group. The Centers for Medicare and Medicaid Services (CMS) will send cancellations for initial coverage by the 26th of the month prior to the coverage effective date if the FF-SHOP does not receive a valid payment before this time. In addition, employers and enrollees may cancel coverage up to 11:59 p.m. ET prior to the month when coverage was to be effectuated.

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