i

CHAPTER11:HEALTHSOURCERISHOPELIGIBILITY

TABLEOFCONTENTS

A. OverviewofHealthSourceRISHOP............................................................................................................1

B. SHOPEmployerEligibility&EnrollmentProcedures.................................................................................1

1) SHOPEmployerEligibilityRequirements..............................................................................................2

a) Employermustbeasmallemployer..............................................................................................2

b) TheemployermustofferSHOPcoveragetoallfull---timeemployees.........................................4

c) Theemployer’sprincipalbusinessaddressoraneligibleemployees’primaryworksitemustbelocatedintheSHOPExchangeservicearea(theStateofRI)....................................................4

2) SHOPEmployerEnrollmentProcedures................................................................................................5

a) CreateanAccount&ProvideEmployerCensusInformation........................................................5

b) EmployerChoosesPlanOption......................................................................................................6

c) EmployerSelectsContributionAmount.........................................................................................6

d) EmployerSelectsOneDentalPlan.................................................................................................7

e) SHOPParticipationRequirements..................................................................................................7

C. SHOPEmployeeEligibilityRequirementsandEnrollmentProcedures.....................................................7

1) SHOPEmployeeEligibilityRequirements..............................................................................................7

2) SHOPEmployeeEnrollmentProcedures...............................................................................................8

a) CreateanAccount...........................................................................................................................8

b) SelectaHealthPlanorChooseNottoEnrollinaHealthPlan.......................................................9

c) SelectaDentalPlanorChooseNottoEnrollinaDentalPlan.......................................................9

D. Employer&EmployeeEnrollmentPeriods................................................................................................9

1) EmployerEnrollmentPeriod.................................................................................................................9

2) EmployeeEnrollmentPeriod.................................................................................................................9

a) AnnualOpenEnrollment................................................................................................................9

b) SpecialEnrollmentPeriodsforEmployeesandDependents.........................................................9

E. EligibilityandEnrollmentAssistance........................................................................................................11

1) DesignationofaBrokerasanAuthorizedRepresentative.................................................................11

2) BrokerFunctionsOnBehalfofanEmployer.......................................................................................12

3) BrokerFunctionOnBehalfofanEmployee........................................................................................12

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F. TerminationfromSHOP............................................................................................................................13

1) Employer..............................................................................................................................................13

a) TerminationDuetoFailuretoPayPremiums..............................................................................13

b) TerminationDuetoLossofEligibility...........................................................................................13

c) VoluntaryTermination/Disenrollment.........................................................................................14

2) Employee..............................................................................................................................................14

a) EmployerDeterminesEmployeeisNoLongerSHOP---Eligible...................................................14

b) EmployernolongerqualifiesforSHOP........................................................................................14

c) Employee---LedTermination(VoluntaryTermination)...............................................................15

G. EffectiveDatesandPremiumPayments..................................................................................................15

AppendixA:SmallBusinessTaxCredit.............................................................................................................15

1) GeneralEligibilityforSmallBusinessTaxCredit.................................................................................15

2) MaximumAmountofSmallBusinessTaxCredit................................................................................15

3) PhaseOutofSmallBusinessTaxCredit..............................................................................................16

4) SampleIRSForm8941.........................................................................................................................17

AppendixB:Notices..........................................................................................................................................18

AppendixC:COBRAContinuationCoverage....................................................................................................19

AppendixD:TaxDocumentsforNewGroupsWithoutQuarterlyWageReport............................................21

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CHAPTER11:HEALTHSOURCERISHOPELIGIBILITY

A. OverviewofHealthSourceRISHOPTheStateofRhodeIslandoperatesaSmallBusinessHealthOptionsProgram(SHOP)Exchangetoprovideemployerswith50orfeweremployeesaccesstoqualifiedhealthplans.EmployereligibilitytoparticipateintheSHOPExchangeisdeterminedimmediatelywhenanemployerestablishesanaccount.Employeeeligibilityisestablishedbytheemployer’splacementoftheemployeeontheemployercensus.Employershavetwooptionsforprovidingtheiremployeesaccesstoqualifiedhealthplans:theSinglePlanoptionortheFullEmployeeChoiceoption.EmployersselectingtheSinglePlanoptionwillmakeonehealthplanavailabletoalleligibleemployees.EmployerselectingFullEmployeeChoicewillmakeastandardcontributiontotheemployer-sponsoredcoverageandtheemployeesmayusethecontributiontopurchaseanyhealthplanintheSHOPExchangetheychoose.Unlikeindividualcoverage,employersmayenrollintheSHOPExchangetoprovidecoveragetoemployeesatanytimeduringtheyear.Eligibleemployeeswillhaveastandardelectionperiodsetbytheemployer1oncetheemployerenrollsinSHOPorwhentheemployeejoinstheemployer.Brokershavehistoricallyplayedacriticalroleintheenrollmentandmaintenanceofsmallgrouphealthplans,andthisrelationshipcontinuesintheSHOPExchange.Ifauthorizedbyanemployer,brokerscanbeassignedtotheemployer’saccountandmakedecisionsregardingemployers’andemployees’coverageoptions.ThisChaptercontainsadditionaldetailsonemployerandemployeeeligibilityforSHOP,conditionsregardingenrollmentperiods,brokerrepresentation,paymentpolicies,anddisenrollmentsfromSHOP.TheAppendixcontainsinformationontheSmallBusinessTaxCreditavailabletocertainSHOPemployerstohelpthempayforhealthinsurancepremiums,aswellasinformationonCOBRAand“mini-COBRA”coverageforemployees.

B. SHOPEmployerEligibility&EnrollmentProceduresSmallemployerslocatedinRhodeIslandcanparticipateintheSHOPExchangeiftheyoffercoveragetoallfulltimeemployeesandprovideanacceptablecontributiontowardemployeecoveragecosts.ThissectiondetailsthespecificeligibilityrequirementsforsmallemployerswantingtoparticipateintheSHOPExchange.ThissectionalsodistinguishesbetweeninformationthatisneededtodetermineSHOPeligibilityversusinformationthatisneededtoestablishanemployerSHOPaccountinorderfortheemployertoinviteemployeestoenrollincoverage.Inordertoviewplansorgetquotesbeforeenrolling,employers,brokersandotherrepresentativescangotowww.healthsourceri.comandaccessaside-bysideratesheet,aswellasuseaplanratecalculatorthatdisplaysalistofplansandrateinformation.Brokersarealsoofferedaquotingtool.ToactuallyofferemployeeshealthplansavailablethroughtheSHOPExchange,employersmustcreateanaccount.Thus,atthistime,employereligibilityisintegratedwiththeaccountcreationprocess.

145CFR155.725(c)(2)

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1) SHOPEmployerEligibilityRequirements

Aneligibleemployermustmeetthreerequirements:a)Mustbeasmallemployer,b)MustofferSHOPExchangecoveragetoallfull-timeemployees;andc)MusthaveaprincipalbusinessaddressoraprimaryworksitewitheligibleemployeesintheSHOPExchangeservicearea(theStateofRhodeIsland).2

a) Employermustbeasmallemployer

Toqualify,employersmusthaveatleastoneenrolledemployeewhoisnottheownerorthespouseoftheowner.3Anemployerisanypersonwithoneormoreemployeesactingdirectlyasanemployer,orindirectlyintheinterestofanemployer,inrelationtoanemployeebenefitplan,andincludesagrouporassociationofemployersactingforanemployerinsuchcapacity.4Startingin2016,asmallemployerisdefinedasanemployerwhoemployedanaverageofatleastonebutnotmorethan50employeesonbusinessdaysduringtheprecedingcalendaryearandwhoemploysatleastoneemployeeonthefirstdayoftheplanyear.Inthecaseofanemployerthatwasnotinexistencethroughouttheprecedingcalendaryear,thedeterminationofwhethertheemployerisasmallemployerisbasedontheaveragenumberofemployeesthatitisreasonablyexpectedtheemployerwillemployonbusinessdaysinthecurrentcalendaryear.5Anemployeeisdefinedasanyindividualemployedbyanemployer.6ThenumberofemployeesisdeterminedaccordingtoFederalemployeecountingrulessetforthin26U.S.C.4980(H)(2)(seebelow).7EmployerscanusetheFull-timeEquivalent(FTE)EmployeeCalculator,availableathttps://www.healthcare.gov/shop-calculators-fte/,tocountthetotalnumberofemployeestheyhaveandseeiftheyqualifyforSHOP.

26U.S.Code§4980H–SharedResponsibilityforEmployersRegardingHealthCoverage(B)Exemptionforcertainemployers(i)IngeneralAnemployershallnotbeconsideredtoemploymorethan50full-timeemployeesif—(I)theemployer’sworkforceexceeds50full-timeemployeesfor120daysorfewerduringthecalendaryear,and(II)theemployeesinexcessof50employedduringsuch120-dayperiodwereseasonalworkers.(ii)DefinitionofseasonalworkersTheterm“seasonalworker”meansaworkerwhoperformslabororservicesonaseasonalbasisasdefinedbytheSecretaryofLabor,includingworkerscoveredbysection500.20(s)(1)oftitle29,CodeofFederalRegulationsandretailworkersemployedexclusivelyduringholidayseasons.

245CFR§155.710345CFR155.710;80FR10869445CFR155.20(Anemployerhasthemeaninggiventotheterminsection2791ofthePHSAct,exceptthatsuchtermincludesemployerswithoneormoreemployees);PHSAct,42U.S.C.§300gg-91(d)(6)(term“employer”hasthemeaninggivensuchtermundersection3(5)oftheEmployeeRetirementIncomeSecurityActof1974[29U.S.C.1002(5)};29U.S.C.§1002(5)545CFR155.20645CFR155.20;PHSAct,42U.S.C.§300gg-91(d)(5);29U.S.C.§1002(6)745CFR155.20;26U.S.C.4980H(2)

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(C)Rulesfordeterminingemployersizeforpurposesofthisparagraph—(i)ApplicationofaggregationruleforemployersAllpersonstreatedasasingleemployerundersubsection(b),(c),(m),or(o)ofsection414oftheInternalRevenueCodeof1986shallbetreatedas1employer.(ii)EmployersnotinexistenceinprecedingyearInthecaseofanemployerwhichwasnotinexistencethroughouttheprecedingcalendaryear,thedeterminationofwhethersuchemployerisanapplicablelargeemployershallbebasedontheaveragenumberofemployeesthatitisreasonablyexpectedsuchemployerwillemployonbusinessdaysinthecurrentcalendaryear.(iii)PredecessorsAnyreferenceinthissubsectiontoanemployershallincludeareferencetoanypredecessorofsuchemployer…(E)Full-timeequivalentstreatedasfull-timeemployeesSolelyforpurposesofdeterminingwhetheranemployerisanapplicablelargeemployerunderthisparagraph,anemployershall,inadditiontothenumberoffull-timeemployeesforanymonthotherwisedetermined,includeforsuchmonthanumberoffull-timeemployeesdeterminedbydividingtheaggregatenumberofhoursofserviceofemployeeswhoarenotfull-timeemployeesforthemonthby120.(F)ExemptionforhealthcoverageunderTRICAREortheVeteransAdministrationSolelyforpurposesofdeterminingwhetheranemployerisanapplicablelargeemployerunderthisparagraphforanymonth,anindividualshallnotbetakenintoaccountasanemployeeforsuchmonthifsuchindividualhasmedicalcoverageforsuchmonthunder—(i)chapter55oftitle10,UnitedStatesCode,includingcoverageundertheTRICAREprogram,or(ii)underahealthcareprogramunderchapter17or18oftitle38,UnitedStatesCode,asdeterminedbytheSecretaryofVeteransAffairs,incoordinationwiththeSecretaryofHealthandHumanServicesandtheSecretary.

Example:RhodeIslandManufacturinghadnomorethan48employeesworking30ormorehoursforallof2015.Itincreaseditsfulltimestaffto53employeesinJanuary2016.ItappliesforSHOPExchangecoverageonFebruary2,2016forcoverageonMarch1,2016andincludesitscurrentemployeecountof53.RhodeIslandManufacturingiseligiblefortheSHOPExchangebecauseitsemployeecountwaslessthan50inthepreviouscalendaryearanditemploysatleastoneemployeeonthefirstdayoftheplanyear.

Affiliatedcompaniesmustmeetemployeecountingrequirements.Forpurposesofthissection,‘affiliatedcompanies’meansaffiliatedservicegroups,employeesofacontrolledgroupofcorporations,andemployeesofpartnershipsorproprietorshipswhichareundercommoncontrol.8Companiesthatareaffiliatedcompanies,orthatareeligibletofileacombinedtaxreturnforpurposesoftaxation,shallbeconsideredoneemployer.9

826CFR§414b),26CFR§414(c),26CFR§414(m),&26CFR§414(o)9RIGLS.27-50-3(kk)and26CFR§414b),26CFR§414(c),26CFR§414(m),&26CFR§414(o)

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Example:MimiandRogerown6ClamShacksacrossRhodeIslandandsouthernMassachusettswithatotalof112employeesintheprecedingcalendaryear.NosingleClamShackhasmorethan50employees.EachClamShackappliesforinsurancethroughtheRhodeIslandSHOPExchangeseparately.TheClamShackisnoteligiblebecausealthoughithasmultipleseparatelocations,itfilesonetaxreturn.

AnyeligibleemployerthathasbeencontinuouslyenrolledintheSHOPExchangemaymaintainenrollmentintheSHOPExchangeregardlessofthenumberofemployees.10EmployersthatenteraseligibleemployersintheSHOPExchangeare“grandfathered”intoSHOPeligibilityuntiltheydis-enrollfromtheSHOPExchangeorfailtomeeteligibilitycriteriaunrelatedtotheemployeecount.

• RhodeIslandStateLawrequiresthesizeofasmallemployertobere-determinedannually.11

However,theSHOPExchangemaynotdetermineanemployerineligible,evenifthenumberofemployeesattheemployerincreasesbeyond50,solongastheemployeriscontinuouslyenrolledintheSHOPExchange.12

b) TheemployermustofferSHOPcoveragetoallfull-timeemployees.

ToparticipateintheSHOP,eligiblesmallemployersmustoffercoveragethroughtheSHOPtoallfull-timeemployees.Employersarepermittedtoself-attestthatallfull-timeemployeesareofferedcoveragethroughtheSHOP.13

c) Theemployer’sprincipalbusinessaddressoraneligibleemployees’primaryworksitemustbelocatedintheSHOPExchangeservicearea(theStateofRhodeIsland).

SmallemployersthathaveaprinciplebusinessaddressinRhodeIslandareeligibletoparticipateintheSHOPExchange.14EmployerslocatedinRhodeIslandwillbeaskedtoattestthatthelocationoftheirprimaryaddressisinRhodeIsland.Eligibilityisbasedonthisattestation.

SmallemployerswhopurchaseinsuranceforemployeeswhoseprimaryworksiteisinRhodeIslandwillberequiredtoattestthatalthoughthelocationoftheirprimarybusinessaddressisoutsideofRhodeIsland,theworksiteoftheeligibleemployeesisinRhodeIsland.

ForcompanieswithoperationsinRhodeIslandandanotherstate,employershavetwooptions:

1. Theemployermaychooseasinglehealthplanwithamulti-stateornationalprovidernetworkandofferitinallbusinessoperationlocations.EmployersshouldcreateaSHOPMarketplaceaccountinthestatewheretheprimarybusinesssiteislocated.

2. TheemployermaycreateaSHOPMarketplaceaccountinastatewheretheemployeeshaveaprimaryworksite.AslongasthebusinessmeetsallcriteriatoparticipateinSHOP,theemployercancreateaSHOPaccount.IftheemployercreatesaSHOPMarketplaceaccountinmultiplestateswheretheemployerhasprimaryworksites,theemployermayselectdifferentofferingsineachstate.

1045CFR155.710(d)11RIGLS.27-50-3(kk)1245CFR§155.710(d)13TheExchange’seligibilityprocessallowstheSHOPtoacceptanattestationbyanemployerthatitwilloffercoveragetoallofitsfull-timeemployees,)(CMS-9989-F,March27,2012p.18400)1445CFR§155.710(b)(3)(i)

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2) SHOPEmployerEnrollmentProcedures

ToenrollinSHOP,employersmustcomplywithseveraloperationalrequirements,including:1. CreateanaccountandprovideEmployerCensusInformation,2. Chooseaplanoption;3. Selectacontributionamount;and4. Selectadentalplan.

Whilerequiredtoeffectuateenrollment,theseareproceduralrequirements,andarenotconditionsofemployereligibility.a)CreateAnAccount&ProvideEmployerCensusInformationEmployerAccountInformationEmployersmustprovideabroadsetofaccountinformationincluding:CompanyName,CompanyLegalName,NumberofFTEs,Address,City,ZipCode,FirstNameandLastName,PrimaryPhone,PhoneType,andEmailAddressaspartoftheapplicationprocess.Inaddition,employersmustalsoprovideanEmployerIdentificationNumber,EmployeeCensusandEmployerTaxandWagereports,whichareaddressedinmoredetailbelow.EmployerIdentificationNumber(EIN)ToenrollintheSHOP,businessesmustprovideavalidEmployerIdentificationNumber(EIN)15IfanEINisnotprovided,theEmployer/Brokermaynotfinalizetheaccountapplication.EmployerCensus

Theemployercensusincludesthecompletelistofemployeesanddependentstowhomtheemployerisofferingemployercoverage.Thisisthesinglelistthatdetermineswhichemployeesattheemployerwillbeeligibleforcoverage.ThelistshouldreflectemployerchoicesandguidelinesdescribedinC.1withrespecttoeligibleemployees.Individualswhoworklessthan17.5hoursperweekarenoteligibletobelistedontheemployercensus.Ifemployersofferdependentcoverage,theymustfollowRhodeIslandlawwhenaddingdependentstotheEmployerCensus.

TheStateofRhodeIslandGeneralLawsTITLE27InsuranceCHAPTER27-50SmallEmployerHealthInsuranceAvailabilityActSECTION27-50-3(j)

"Dependent"meansaspouse,childundertheagetwenty-six(26)years,andanunmarriedchildofanyagewhoisfinanciallydependentupon,theparentandismedicallydeterminedtohaveaphysicalormentalimpairmentwhichcanbeexpectedtoresultindeathorwhichhaslastedorcanbeexpectedtolastforacontinuousperiodofnotlessthantwelve(12)months.16

16RIGLS.27-50-3(j)

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Theemployermayeitherusethecensustemplatetouploadtheinformationorprovidetheinformationbyphone,ormanually.Employeraccountcreationcancontinuefortheemployerwithouthavingcompleteaccountinformation(e.g.employeespousesocialsecuritynumberismissing).17Thecensuscanbeediteduntilitisfinalized.Afteritisfinalized,itcannotbeeditedunlessanemployeehasaspecialenrollmentperiod.EmployerTaxandWageReportEmployersprovideataxandwagereportbyuploadingittocompletetheemployer’saccountcreation.HealthSourceRISHOPcanalsouploadthesedocumentsonbehalfoftheemployeriftheyaresubmittedbyfax,email,oronpaper.EmployersmaynotproceedtotheemployeeopenenrollmentperiodwithoutfirstprovidingTaxandWageReports.IfaTaxandWageReportisnotavailable,employersmayuploadalternativedocumentationshowingtheireligibleemployees.AlistofalternativedocumentationisavailableinAppendixD.a) EmployerChoosesPlanOptionEligibleemployerswhohavesuccessfullycreatedSHOPExchangeaccountsmustprovidetheHealthSourceRISHOPwithcertaincoveragedeterminationspriortoHealthSourceRInotifyingemployeesofsuchcoverage.EmployersmustchooseeithertheSinglePlanoptionortheFullEmployeeChoiceoption.SinglePlanOption:Theemployerselectsonehealthplanandthatistheonlyplaneligibleemployeesandtheirdependentsmayenrollin.FullEmployeeChoiceOption:EligibleemployeesmayenrollinanyplanofferedontheSHOPExchange.EmployersselectingFullEmployeeChoicemustselectareferenceplan.Thereferenceplanistheplanonwhichtheemployer’spremiumcontributionisbased.Employeesselectingaplanotherthanthereferenceplanmustpayorsavethedifferencebetweentheplans.Whilesinglechoiceandfullchoicearethemodelsavailabletoemployers,HSRIwillalsoworkwithemployerstohighlightanarrowerlistofplansbyrequest.b) EmployerSelectsAContributionAmount

Employersmustselectacontributionamountofatleasthalfofthecostofemployeeonlycoverage.IntheSinglePlanoption,thisishalfofthecostoftheselectedplan.IntheFullEmployeeChoiceoption,thisishalfofthecostofthereferenceplan.18Thisminimumamountisrequiredtobecontributedtoeachtypeoffamilytier.Thefollowingaretier“levels”recognizedbyHealthSourceRI:• Employee-only• EmployeeandSpouse• EmployeeandChild(ren)• Family

17Thedataelementsontheemployercensusare:LastName,FirstName,EligibilityType(e.g.Employee,SpouseorDependent),DateofBirth,Address,SocialSecurityNumber,AssociatedEmployeeID,ExpectedtoEnroll,CoverageLevel,Group,Selector;seealsoPhase1FunctionalDesign–SHOP4.51.2DataElements.18Thecontributionisperformedsuchthateachemployeewouldpaythesameamountforcoverageifenrolledinthereference plan.

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• Child(ren)only(Dental/COBRAonly)HealthSourceRIpermitsemployerstotailoremployercontributionamountsbasedonemployeepositionwithintheorganization.EmployersmustadheretoRhodeIslandanti-discriminationlawintailoringemployercontributionlevels.19

c) EmployerSelectsOneDentalPlan

Afterselectingahealthplan,theEmployerselectsexactlyonedentalplan.Selectingadentalplanisrequired,unlesstheemployeratteststoofferingaseparatedentalplanthatsatisfiesthepediatricdentalportionoftheEssentialHealthBenefits.PricingfordentalplanswillbeseparatefrommedicalplansontheExchange.Employercontributionisoptionalfordentalplans.20Ifanemployerchoosesnottocontributetodentalcoverage,employeerateswillnotbecalculatedinacompositemanner;eachemployeewillinsteadhaveratesspecifictothatemployeeandanydependentswhoareenrolling.Whilemedicalplansdonotcurrentlyincludeembeddeddentalcoverage,thismaychangeinfutureyears.

Aftertheselectionofthedentalplan,employerplanselectioniscompleted.TheemployeewillthenbenotifiedofeligibilitytoparticipateintheSHOPExchange.

d) SHOPExchangeParticipationRequirements.

FederalregulationspermitthestateMarketplacestosetparticipationrateparameters.21TheparticipationratereferstoparticipationintheSHOPExchange,andnotparticipationinaspecificQHPorQHPsfromaspecificissuer.Todate,HealthSourceRIhaselectednottosetanyminimumparticipationstandard.

C. SHOPEmployeeEligibilityRequirementsandEnrollmentProcedures

1) SHOPEmployeeEligibilityRequirementsSHOPemployeeeligibilityisbasedontheemployercensus.Anemployeeincludedontheemployercensusisaneligibleemployee.Anemployeenotincludedontheemployeecensusisnotaneligibleemployee.Employersmaychoosetoincludethedependent(s)ofemployeesontheEmployerCensus.AsexplainedaboveinB.2.a.,dependentsmustmeetthecriteriaofa“dependent”asdefinedunderRhodeIslandlaw.Employersmaychoosewhether,asageneralrule,toincludeemployeedependentsinthepoolofeligiblecandidatesforcoverage.Ifnotcoveringemployeedependents,employerscannotincludetheminthecensus.Whenanemployee’sdependentreachestheageof26,thedependentisnolongereligibleforcoveragethroughtheemployee’splan,andmustseekanalternativesourceofcoverage.Whenadependent“agesout”ofcoverage,HealthSourceRIwillsendthedependentadisenrollmentnoticeandwilldis-enrollthedependentasoftheir26thbirthday.

19RIGL§28-5-7(1)(ii)20Thecontributionisperformedsuchthateachemployeewouldpaythesameamountforcoverageifenrolledinthereference plan2145CFR§155.705(b)(10)

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2) SHOPEmployeeEnrollmentProceduresSimilartoemployereligibility,thereareseveraloperationalrequirementsforemployeestosuccessfullyeffectuateenrollmentinahealthplanthroughtheSHOPoncetheyhavebeendeterminedeligible.TheemployeewillreceivenotificationthathisorheremployerregisteredfortheHealthSourceRISHOPandthattheemployee(andanydependents)iseligibleforcoverage.Employeesmustthen:

1. Createanaccount;2. Selectahealthplan(orchoosenottoenrollinahealthplan);and3. Selectadentalplan(orchoosenottoenrollinadentalplan).

a) CreateanAccountEmployerCensusMatching

OnceanemployeereceivesnotificationofeligibilityfromtheHealthSourceRISHOP,theemployeemustestablishanaccount.TheemployeemustsubmithisorherFirstName,LastName,DateofBirthandSocialSecurityNumber.Allfurnishedinformationmustmatchtheemployercensusexactlytosuccessfullycreateanaccount.Therefore,ineligibleemployeesnotincludedonthecensuscannotbematchedtoanemployerandcannotcreateanaccount.ProvideEmployeeInformationWhentheemployeeispresentonthecensus,theemployeeproceedstocreateanaccount.Theemployeemustproviderequiredinformationtocreatetheaccount.Dataelementsinclude:Username,Password,FirstName,MiddleName,LastName,Suffix(e.g.Jr),Gender,DateofBirth,SocialSecurityNumber,AddressLine1,AddressLine2,Apt/Unit#,City,State,ZIP,EmailAddress,ThreeSecurityQuestionsandtheUserAcceptanceAgreement.Oncetheinformationhasbeensubmittedandtheaccounthasbeencreated,employeeswillbeabletoselectaplan.SpecifyRelationshiptoHouseholdMembersEachemployeeisaskedduringaccountcreationtoconfirmtherelationshiptoeachpotentialenrolleetheemployerhasincludedonthecensus.Theenrolleemustbedescribedaseither“self,”“spouse,”or“dependent.”Ifrequestedbytheemployer,theemployeemustbeabletoprovideproofoftheinsurablerelationship.22AnemployermayrequestthatHSRIremoveanemployeeordependentwhoisnoteligible,asdeterminedbytheemployer.Employeeanddependenteligibilityisdeterminedbytheemployerintheeventofadispute.SelectHouseholdMembersWhoWillEnrollTheemployeemustselectwhicheligiblemembersofthehouseholdaretobeenrolledinaplanpriorto

22RIGLS.27-50-3(j);"Dependent"meansaspouse,anunmarriedchildundertheageofnineteen(19)years,anunmarriedchildwhoisastudentundertheageoftwenty-five(25)years,andanunmarriedchildofanyagewhoisfinanciallydependentupon theparentandismedicallydeterminedtohaveaphysicalormentalimpairmentwhichcanbeexpectedtoresultindeathor whichhaslastedorcanbeexpectedtolastforacontinuousperiodofnotlessthantwelve(12)months

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selectingtheplan.BasedontherelationshipdefinedaboveunderSpecifyRelationshiptoHouseholdMembers,thefamilytypewillbedeterminedandacorrelatingpremiumisapplied.Forexample,ifanemployeeenrollsherselfandherspouseandnochildren,theplantypeandpricingwillbebasedonthefamilytype“employee&spouse.”b) SelectaHealthPlanorChooseNottoEnrollinaHealthPlanTheemployerdetermineswhetheroneormoreplansareofferedtoemployees.SinglePlanOption:IftheemployerhasselectedtheSinglePlanoption,theemployeemaychoosetoenrollintheplanofferedbytheemployerorchoosenottoenrollinaplan.FullEmployeeChoiceOption:Iftheemployerhasselectedthefullemployerchoiceoption,theemployeeisnotifiedofthereferenceplan.TheemployeemayenrollinanyavailableplanofferedthroughtheHealthSourceRISHOP.Theemployeewillberesponsibleforpayinghisorhercontributionbaseduponthecompositecostofthereferenceplan,plusorminusanydifferencebetweenthe“list-bill”costofthereferenceplanandthe“list-bill”costoftheplanselectedbytheemployee.Whilesinglechoiceandfullchoicearethemodelsavailabletoemployers,HSRIwillworkwithemployerstohighlightanarrowerlistofplansbyrequest.c) SelectaDentalPlanorChooseNottoEnrollinaDentalPlan

Employeesmustthenselectadentalplanoption.Theemployeecanchoosetheplanmadeavailablebytheemployerorcanchoosenottoenrollincoverage.

D. Employer&EmployeeEnrollmentPeriods

EmployersmayenrollintheHealthSourceRISHOPatanytimeduringtheyear.Foremployees,theSHOPenrollmentperioddiffersfromtheIndividualExchangeMarketplace;thelatterhasasetopenenrollmentperiodeachyear.TheHealthSourceRISHOPhasemployer-specificannualopenenrollmentperiodsheldthroughouttheyearandinaccordancewiththeemployer’splanyear.

1) EmployerEnrollmentPeriodEmployersmayenrollintheHealthSourceRISHOPatanytimeduringtheyear.Employersmustcompletetheirapplicationwithenoughtimetocompleteemployeeenrollmentandpaybeforethepaymentdeadline.

2) EmployeeEnrollmentPeriod

a) AnnualOpenEnrollment

Eachyeartheemployerwillhaveanopenenrollmentperiod,duringwhichanyeligibleemployeemaymakechanges to his or her enrollment. Changes include: Enrolling in new coverage, changing plans, changingcovered family members (enrolling or disenrolling dependents), enrolling in a dental plan, and otherchanges.

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TheSHOPmustprovideaninitialopenenrollmentperiod,andanannualopenenrollmentperiod.23b) SpecialEnrollmentPeriodsforEmployeesandDependentsThe SHOP Exchange must provide employees and dependents with special enrollment periods whenindividualsmeet the requirements listedbelow.24Employer-provided informationcandeterminewhetheremployees(ortheirdependents)qualifyforaspecialenrollmentperiod.

NewlyqualifiedemployeesmustreceiveanenrollmentperiodstartingonthefirstdayofbecomingeligibletoenrollintheSHOPExchange.25Accordingtofederalrules,theprobationaryperiod(“waitingperiod)foremployee eligibility cannot exceed 90 days. It is the employer’s responsibility to maintain records ofemployeehiredatesandadministertheprobationaryperiod.

Individualsareeligibleforaspecialenrollmentperiodiftheymeetoneofthefollowingcriteria:• Aqualifiedindividualbecomesnewlyeligibleforcoverage(e.g.,isnewlyhiredorbecomeseligiblebased

onhoursworked.)• Aqualifiedindividualordependentlosesminimumessentialcoverage;failuretopaypremiumsisnot

consideredalossofminimumessentialcoverage.26• Aqualifiedindividualgainsadependentorbecomesadependentthroughmarriage,birth,adoptionor

placementforadoptionorfostercare;• Aqualifiedindividual’senrollmentornon-enrollmentinaQHPisunintentional,inadvertent,or

erroneousandistheresultoftheerror,misrepresentation,orinactionofanofficer,employee,oragentoftheExchangeorHHS,oritsinstrumentalitiesasevaluatedanddeterminedbytheExchange.Insuchcases,theExchangemaytakesuchactionasmaybenecessarytocorrectoreliminatetheeffectsofsucherror,misrepresentation,orinaction;

• EnrolleeadequatelydemonstratestoHealthSourceRIthattheQHPinwhichheorsheisenrolledsubstantiallyviolatedamaterialprovisionofitscontractinrelationtotheenrollee;

• AqualifiedindividualorenrolleegainsaccesstonewQHPsasaresultofapermanentmove;• AnAmericanIndianorAlaskanNative,asdefinedbySection4oftheIndianHealthCareImprovement

Act,mayenrollinaQHPorchangefromoneQHPtoanotheronetimepermonth;• IthasbeendeterminedbytheExchangethequalifiedindividual/dependentwasnotenrolledinaQHP

orwasnotenrolledintheQHPheorsheselected(byanon-Exchangeentityprovidingenrollmentassistance/activities).

• AqualifiedindividualorenrolleedemonstratestotheExchange,inaccordancewithguidelinesissuedbyHHS,thattheindividualmeetsotherexceptionalcircumstancesastheExchangemayprovide;

• LoseseligibilityforMedicaidorCHIP(RIteCare),orbecomeseligibleforassistance(asrelatedtocoveragethroughSHOP)underMedicaidorCHIP(RIteCare)(60dayspecialenrollmentperiodinthesecases)

• QHPisdecertified.IfanemployerhasselectedaQHPinSinglePlanthathasbeendecertified,employeecoverage in thatplanwillend. Theemployerwillbeeligible toreselectanewplan foremployeesandemployeeswillbeeligibletoelecttoenrollornottoenrollinthiscoverage.IftheemployerhasselectedFull Employee Choice and one or more employees is enrolled in a QHP that is decertified causing

2345CFR§155.725(e).24see45CFR§155.725(a)(3);also45CFR§155.420(d)(1)-(2),45CFR§155.420(d)(4)-(5),45CFR§155.420(d)(7)-(10)2545CFR§155.725(g)2645CFR§155.420(e)

11

coverage in coverage in that QHP to terminate, the terminated employees are eligible for a specialenrollmentperiod(SEP)toreselectaQHP.

c) EffectivedatesofcoverageTheeffectivedateofcoverageisthefirstdayofthemonthfollowingthequalifying(“triggering”)event,withexceptionsforbirth,adoption,andfostercare,inwhichcasestheeffectivedateofcoverageisthedateofthequalifyingevent.E. EligibilityandEnrollmentAssistance

Brokersplayanintegralroleintheprocurementandmaintenanceofhealthinsuranceforsmallemployers.TheroleofthebrokerdoesnotchangeintheSHOPExchange.Foremployerschoosingtoworkwithbrokerstoassistinenrollmentandotherprocesses,brokerswillmaintainthesametraditionalfunctions.IntheRhodeIslandSHOPExchange,ifauthorizedbyanemployer,abrokermayselectandmanagetheemployer’shealthinsuranceofferings.Inaddition,abrokerauthorizedbyanemployeemayselectandmanagetheemployee’shealthinsurance.Brokersmayassistemployersandemployeeswithoutauthorizationforcertaintaskssuchasbrowsinghealthplans,evaluatingeligibilityforthesmallbusinesstaxcreditandotherfunctions.

1) DesignationofaBrokerBrokersmaybedesignatedbyemployerstoactonbehalfoftheemployer.Designationofabrokermustbedoneelectronically,inwriting,orbyphone.27Withoutauthorization,whichisconsideredlegallybindingbytheHealthSourceRISHOP,abrokershallnotbeabletosubmitinformationorreceivenoticesonbehalfofanemployerortheemployeesofthatemployer.Thebrokerfortheemployermayactonbehalfofanemployeewithoutformalauthorizationfromtheemployee.

Inordertobedesignatedtheauthorizedbroker:

Brokermustbecertified.BrokercertificationrequiresthatthebrokerpassatrainingcourseprovidedbyanExchangeBrokerLiaison.Thebrokerreceivesabrokercertificationnumber,whichwillberecognizedbytheHealthSourceRISHOP.

Brokermusthaveanaccount.BrokermaycreateabrokeraccountanytimeafterSHOPExchangecertification.Privacy.Brokermustcomplywiththeprivacyandsecuritystandardspursuantto45CFR§155.260,whichlimitshowabrokermayuseanyinformationgainedaspartofprovidingassistanceandservicestoaqualifiedindividual.

Duration.Thedesignationofabrokerbyanemployerisvaliduntil:

2778FR42313;,45CFR§155.227(g)

12

• Theemployerdesignatesanalternativebroker.28

• TheemployernotifiestheSHOPExchangethattheauthorizedrepresentativeisnolongerauthorizedtoactontheemployerbehalf.29

• TheauthorizedrepresentativenotifiestheSHOPExchangethatheorshewillnolongeractonbehalfoftheemployer.30

• Theauthorizedrepresentative’sSHOPExchangeaccountisclosed.• Theauthorizedrepresentativeloseshisorhercertification.

2) BrokerFunctionsOnBehalfofanEmployerAnemployer’sassignedbrokermayperformallSHOPExchangefunctionsonbehalfoftheemployer.Thereisnolimittowhatfunctionsabrokermayperformandallinformationprovidedtotheemployerisalsoprovidedtotheemployer’sassignedbroker.AnemployermayrequestthatthebrokeronlyperformasubsetofSHOPExchangefunctions.Thefollowingaretypicalexamplesofactionsthatbrokersmayperformonbehalfofanemployer:

• CreateAccount• PlanSelection• ManageEmployerCensus• FileAppeals

3) BrokerandEmployerFunctionOnBehalfofanEmployeeAnemployer’sbrokermayperformallExchangefunctionsonbehalfoftheemployeesofthatemployer.Thereisnolimittowhatfunctionsabrokermayperformandallinformationprovidedtotheemployeeisalsoprovidedtotheemployer’sassignedbroker.AnemployeemayrequestofabrokerthatthebrokeronlyperformasubsetofExchangefunctions.Notethatanemployermayalsoperformthesefunctionsonbehalfofemployees.Thefollowingaretypicalexamplesofactionsthatbrokersmayperformonbehalfofanemployee:

• CreateAccount• PlanSelection• FileAppeals

4) Broker-RelatedAssistanceNotRequiringAuthorizationBrokersdonotrequireformalauthorizationfromtheSHOPExchangetoassistemployersandemployeesinmattersrelatedtohealthinsurancecoverage,butnotrelatedtotheSHOPExchange.Forexample,withoutformalauthorization,brokersmayassistemployeesinprovidinginformationtotheemployerfortheemployercensus.BrokersmayassistemployeesbyansweringquestionsaboutplansontheHealthSourceRISHOP.BrokersmayalsoassistemployeeswithrequestingspecialenrollmentperiodsfromemployersandensuringeligibilityforCOBRA.Brokersmayquoteanemployerwithoutfirstbeingauthorized.2845CFR§155.227(d)(1)2945CFR§155.227(d)(2)3045CFR§155.227(d)(3)

13

F. TerminationfromSHOPThissectionaddressestermination(disenrollment)fromSHOPforbothemployersandemployees.SHOPemployersandemployeescanleavetheSHOPatanytime.Thisisoftencalledavoluntarytermination.Otherterminationscanbecausedbyanumberoffactors,includingnon-paymentofpremiumorlossofeligibility.FederalregulationandRhodeIslandpoliciessetrequirementsaroundtermandterminations.Federalregulationsrequireissuerstomaintainrecordsofallterminations.31

1) Employer

a) TerminationDuetoFailuretoPayPremiums

RhodeIslandrequiresthatemployershavea30-daygraceperiodbeforeinsurersarepermittedtoterminatetheemployer’scoverage.Paymentduringthattimeperiodpreventstermination.Terminationispermittedifnopaymentismadeattheendofthe30-daygraceperiod.ThisterminationisinitiatedbyHealthSourceRI.

Ifthegraceperiodhaspassedandtheemployerhasnotpaidpremiums,coveragewillbeterminatedeffectivethelastdayofthegraceperiod.Example:John’sbaitshop’spremiumpaymentforJanuarywasdueonDecember23,butJohndidnotpayhisbillbyJanuary31.SocoverageforthebaitshopwillbeterminatedeffectiveJanuary31.Ineventofadjustmentstobilling(e.g.,addedorremovedanewemployeeinagivenmonthbutwerealreadybilled)forthatmonth,anemployershallnotbeconsideredlateinpaymentiftheemployerpaidwhattheywereinitiallybilledforthatmonth.Anyadjustmentswillbereflectedinthenextbillingstatement,andtheemployerwillnotbeconsideredlateonpayment.Afterterminationduetofailuretopaypremiums,informationregardinganyunpaidbalanceforatermedgroupwillbetransferredtotheappropriateinsurer(s).Insurersreservetherighttopursuecollectionsforunpaidbalancesoncetransferredtothem.

b) TerminationDuetoLossofEligibility

TheRhodeIslandSHOPExchangeonlypermitsemployerswhoeitherhaveaprimarybusinessaddressorhaveemployeeswhoseprimarybusinesslocationisintheserviceareatoparticipateintheSHOPExchange.IftheSHOPExchangelearnsthatemployersarenolongervalidemployers,ortheynolongermeetthelocationrequirement,coveragewillbeterminatedeffectivetheendofthecoveragemonthwhenthisdeterminationhasbeenmade.Ifanemployernolongerqualifiesasagroupduetono“commonlaw”employeesenrolled,coveragewillbeterminatedattheendoftheplanyear.

3145CFR§156.270(h)

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c) VoluntaryTermination/Disenrollment

TheHealthSourceRImustpermitanenrolleetodisenrollfromcoverage.32EmployersmustcontacttheHealthSourceRISHOPtodisenroll.TheHealthSourceRISHOPmustconfirmthatanyoutstandingpaymentsaremadebeforedisenrollment.ThecompletionofthedisenrollmentoccurswhentheHealthSourceRISHOPprovidestheemployerwithaconfirmationofdisenrollment.

d) SHOPGroupReinstatements

Asmentionedabove,SHOPgroupscanbeterminatedfornon-paymentiftheyaremorethan30daysbehindonpayment.Ifagroupisterminatedfornon-payment,thatgroupmayrequesttobereinstatedundercertainconditions.

1. Forgroupsrequestingreinstatementwithinthesameplanyear:Tobereinstated,thegroupmustfirstpayallpastduepremiumsandthepremiumforanyuncoveredmonths,includingthecurrentmonth.Onceanegativebalancecoversallcoveragemonths,includingthecurrentmonth,HealthSourceRIwillreactivatecoveragefortheemployeesofthegroup.Theeffectivedatewillbethedayaftertheterminationdate.Agroupmaynotbereinstatedmorethanonceduringaplanyear.

2. Forgroupsrequestingreinstatementforamonthaftertheirnormalrenewalmonth:Coveragecannotbereinstatedbacktoterminationdate.Coveragecanbeginwithanewplanyear,onthefirstofthemonthaftertherequest.Tobereinstated,thegroupmustfirstpayallpastduepremiumsandthepremiumforthefirstmonthoftheirnewspanofcoverage.Onceanegativebalanceofatleastonemonth’scoverageexistsontheaccount,HealthSourceRIwillcreateanewplanyearforthegroup.Theeffectivedatewillbenoearlierthanthefirstofthemonthaftertherequest.

2) Employeea) EmployerDeterminesEmployeeisNoLongerSHOP-EligibleTheHealthSourceRISHOPmayinitiatedisenrollmentfromcoverageiftheenrolleeisnolongereligibleforcoverage.33Thisincludestheemployerchangingtheemployee’seligibilityduetoachangeinemploymentstatusoranotherreason.Ifanemployeeisterminatedfromcoverageforanyreason,theemployeemustbegivenanoticeofterminationincludingthereasonforterminationandtheterminationeffectivedate.34TheemployermustalsonotifytheExchangeoftheterminationandthereasonfortermination.TheemployeemayalsohavetherighttoenrollincoveragethroughCOBRAorRIExtendedBenefits,whicharediscussedintheappendix.b) EmployerDisenrollsfromSHOPTheemployermayeithervoluntarilydis-enrollfromcoverageormaybeterminatedfornon-paymentofpremiumsorotherreasons.TheresultistheemployeewouldnolongerbeeligibleforcoverageintheSHOP.Inaddition,asdescribedinAppendixC,theemployeewouldnotbeeligibleforcontinuationcoveragebecausethegrouphealthnolongerexists.

3245CFR§155.430(b)(1)3345CFRS.155.430(b)(2)3445CFRS.156.270(b)

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c) Employee-LedTermination(VoluntaryTermination)

HealthSourceRImustpermitanenrolleetodisenrollincoverage.35Terminationwillbeeffectiveasofthedatespecifiedbytheemployee,butmustbethelastdayofthemonth,orthelastdayofthepriormonth.G. EffectiveDatesandPremiumPayments

EffectivedatesofcoveragearediscussedindetailinChapter3.PremiumpaymentsandbillingarediscussedindetailinChapter12.

H. AppendixA.SmallBusinessTaxCreditOverview:Section45RoftheInternalRevenueCodeallowscertainsmallbusinessespurchasinghealthinsuranceonbehalfofemployeesthroughtheSmallBusinessHealthOptionsProgram(SHOP)ExchangetobeeligiblefortaxcreditsforthefirsttwoyearstheyoffercoveragethroughtheSHOPExchange.36ThecredithasbeenavailabletoemployersmeetingthesamestandardsinyearspriortothelaunchoftheExchange.

CertainsmallemployersareeligibletoreceiveasmallbusinesstaxcreditundertheACAtoreducetheeffectivecostofcontributingtohealthinsurancecoverage.

1) GeneralEligibilityforSmallBusinessTaxCredit

Tobeeligibleforthecredit,thesmallemployersmust:• Employnomorethan25fulltimeequivalents(FTEs);37• Haveanaveragewageacrossallemployeesthatdoesnotexceed$50,000(indexedannuallyafter2014);

and• Provideacontributionofatleast50percentofthecostofpremiumsforallemployeeseligiblefor

coverage.38

TheIRShasclarifiedthat,becausethestatutedoesnotrequiretheemployeesoftheemployertobeperformingservicesinatradeorbusiness,thetaxcreditisalsoavailabletohouseholdemployers.39

3545CFR§155.430(b)(1)3626CFR§45R37FTEcalculationforthesmallbusinesstaxcreditisdifferentthanFTEcountforSHOPeligibility.3826CFR§45R(d)39SeeIRSNotice2010-082,availableathttp://www.irs.gov/pub/irs-drop/n-10-82.pdf

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2) MaximumAmountofSmallBusinessTaxCreditTheamountofthetaxcreditvariesbythetypeoforganizationandtheyear.Thefullcreditis50percentoftheemployerportionofthepremiumfortaxableemployers.Thefullcreditis35percentoftheemployerportionofthepremiumfortax-exemptemployers.Tax-exemptemployersreceivethecreditbyreducingpayrolltaxliabilitybytheamountofthecredit.

2014andafter40Taxexemptbusiness 35percentTaxablebusiness 50percent

3) PhaseOutofSmallBusinessTaxCredit

Thetaxcreditisbasedonaslidingscalewiththefullamountavailabletoemployerswith10orfewerFTEsandwithaveragewagesof$25,000orlessperyear.Thetaxcreditisreducedastheemployerincreasesinsizeand/orifaveragewagesarehigherthan$25,000.ForataxableemployerintheSHOPExchange,thetaxcreditisreducedfrom50percentat$25,000inaveragewagesto0percentat$50,000inaveragewages.Thesewagevaluesincreaseannually.Simultaneously,thetaxcreditisreducedfromamaximumof50percentat10FTEsto0percentat25FTEs.

Example:ThecostofpremiumsforMelissa’sautobodyshopare$3,000peremployee.BecauseMelissapays100percentofthepremiumsforher8employees,whoearnanaverageof$24,000ayear,shewillreceivethefulltaxcredit.Thistaxcreditis50percentofthepremiumpaidor$1,500peremployeeenrolled.IfMelissacontributed$2,000toheremployeepremiums,shewouldreceive$1,000intaxcreditsforeachemployeeenrolled.4) SampleIRSForm8941:CreditforSmallEmployerHealthInsurancePremiums

4026CFR§45R(b)

17

Form 8941Department of the Treasury Internal Revenue Service

Credit for Small Employer Health Insurance Premiums Attach to your tax return.

Information about Form 8941 and its separate instructions is at www.irs.gov/form8941.

OMB No. 1545-2198

2014Attachment Sequence No. 63

Name(s) shown on return Identifying number

A Did you pay premiums during your tax year for employee health insurance coverage you provided through a Small Business Health Options Program (SHOP) Marketplace (or do you qualify for an exception to this requirement)? (see instructions)

Yes. Enter Marketplace Identifier (if any):No. Stop. Do not file Form 8941 (see instructions for an exception that may apply to a partnership, S corporation, cooperative, estate, or trust).

B Enter the employer identification number (EIN) used to report employment taxes for individuals included on line 1 below ifdifferent from the identifying number listed above

Caution. See the instructions and complete Worksheets 1 through 7 as needed.1 Enter the number of individuals you employed during the tax year who are considered

employees for purposes of this credit (total from Worksheet 1, column (a)) . . . . . . . 12 Enter the number of full-time equivalent employees (FTEs) you had for the tax year (from

Worksheet 2, line 3). If you entered 25 or more, skip lines 3 through 11 and enter -0- on line 12 23 Average annual wages you paid for the tax year (from Worksheet 3, line 3). If you entered

$51,000 or more, skip lines 4 through 11 and enter -0- on line 12 . . . . . . . . . . 34 Premiums you paid during the tax year for employees included on line 1 for health insurance

coverage under a qualifying arrangement (total from Worksheet 4, column (b)) . . . . . . 45 Premiums you would have entered on line 4 if the total premium for each employee equaled the

average premium for the small group market in which the employee enrolls in health insurancecoverage (total from Worksheet 4, column (c)) . . . . . . . . . . . . . . . . . 5

6 Enter the smaller of line 4 or line 5 . . . . . . . . . . . . . . . . . . . . 67 Multiply line 6 by the applicable percentage:

• Tax-exempt small employers, multiply line 6 by 35% (.35)• All other small employers, multiply line 6 by 50% (.50) . . . . . . . . . . . . . 7

8 If line 2 is 10 or less, enter the amount from line 7. Otherwise, enter the amount from Worksheet 5, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

9 If line 3 is $25,000 or less, enter the amount from line 8. Otherwise, enter the amount fromWorksheet 6, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . 9

10 Enter the total amount of any state premium subsidies paid and any state tax credits available to you for premiums included on line 4 (see instructions) . . . . . . . . . . . . . . 10

11 Subtract line 10 from line 4. If zero or less, enter -0- . . . . . . . . . . . . . . . 1112 Enter the smaller of line 9 or line 11 . . . . . . . . . . . . . . . . . . . . 1213

If line 12 is zero, skip lines 13 and 14 and go to line 15. Otherwise, enter the number ofemployees included on line 1 for whom you paid premiums during the tax year for healthinsurance coverage under a qualifying arrangement (total from Worksheet 4, column (a)) . . . 13

14 Enter the number of FTEs you would have entered on line 2 if you only included employees included on line 13 (from Worksheet 7, line 3) . . . . . . . . . . . . . . . . . 14

15 Credit for small employer health insurance premiums from partnerships, S corporations, cooperatives, estates, and trusts (see instructions) . . . . . . . . . . . . . . . 15

16

Add lines 12 and 15. Cooperatives, estates, and trusts, go to line 17. Tax-exempt smallemployers, skip lines 17 and 18 and go to line 19. Partnerships and S corporations, stop here and report this amount on Schedule K. All others, stop here and report this amount on Form3800, line 4h . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

17 Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

18 Cooperatives, estates, and trusts, subtract line 17 from line 16. Stop here and report this amount on Form 3800, line 4h . . . . . . . . . . . . . . . . . . . . . . . . . 18

19 Enter the amount you paid in 2014 for taxes considered payroll taxes for purposes of this credit (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 19

20 Tax-exempt small employers, enter the smaller of line 16 or line 19 here and on Form 990-T, line 44f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 37757S Form 8941 (2014)

18

I. AppendixB.NoticesBelowarelistsofnoticesthatarerequiredunderfederalregulationtobesenttoemployerand/oremployees.

1) EmployerNotices

a) EmployerNotices:EmployerNoticeof IncompleteInformation:OncetheSHOPapplicationhas been received by the small employer, the SHOP must notify the employer of anyinconsistencies.41

b) EmployerSHOPEligibility:TheSHOPmustprovideanemployerseekingtopurchasecoveragethroughtheSHOPwithanoticeofapprovalordenial.42

c) EmployerNoticeofAnnualElectionPeriod:TheSHOPmustprovidenotificationtoaqualifiedemployeroftheannualelectionperiodinadvanceofsuchperiod.43

2) EmployeeNotices

a) NoticeofIncompleteInformation:TheSHOPmustnotifytheindividualoftheinabilitytosubstantiatehisorheremployeestatus.44

b) EmployeeSHOPEligibility:TheSHOPmustprovideanemployeeseekingtoenrollinaSHOPQHPwithanoticeofapprovalordenial.45

c) EmployeeNoticeofEnrollment:TheSHOPmustensurethataQHPissuernotifiesaqualified

employeeofenrollmentinaQHPwithaneffectivedateofcoverage.46

d) EmployeeTerminationofCoverageNotice:TheSHOPmustnotifytheemployerifanyemployeeterminatescoveragefromaQHP.47

e) Employer Non-payment Notice: Employers will be notified if they fail to make apremiumpaymentpriortothepaymentdeadline.RhodeIslandstatelawdictatesthata 30-day grace period be implemented in the small group market before theterminationprocessisinitiated.48

g)EmployeeNoticeofOpenEnrollmentPeriod:TheSHOPmustprovidenotificationtoaqualifiedemployeeoftheannualopenenrollmentperiodinadvanceofsuchperiod49

4145CFR§155.715(d)(1)(ii)4245CFR§155.715(e)4345CFR§155.725(d)4445CFR§155.715(d)(2)(ii))4545CFR§155.715(f)4645CFR§155.720(e)4745CFR§155.720(h)48R23-1-1-ACAS.10.7

4945CFR§155.725(f)

19

J. AppendixC.ContinuationCoverageThefederalConsolidatedOmnibusReconciliationAct(COBRA)establishescontinuationofcoveragerightsundergrouphealthplans.Theserightsarecommonlyreferredtoas“COBRA”rights.COBRArightsaregenerallylimitedtogrouphealthplansofemployerswithtwentyormoreemployees,50butmanystates,includingRhodeIsland,haveestablishedlawstoextendsimilarrightstoemployeesofemployerswithfewerthantwentyemployees.51

A. COBRAThebasicruleunderCOBRAisthatagrouphealthplanofanemployerwith20ormoreemployeesisrequiredtoprovideeach“qualifiedbeneficiary”whowouldlosecoveragebecauseofa“qualifyingevent”anopportunitytoelect“continuationcoverage”withinan“electionperiod.”52ThefollowingdescriptionofkeyprovisionsofCOBRAdoesnotaddresssomespecialsituations.

A“qualifiedbeneficiary”isaspouseordependentchildcoveredunderanemployer’splanbeforeaqualifyingeventoccurs.Theemployeeisalsoconsideredaqualifiedbeneficiaryinthecaseofanemployeeterminationorreductioninhours.53

A“qualifyingevent”thattriggerstheCOBRAcontinuationrightisanyofthefollowing(whentheeventwouldotherwisecauseaqualifiedbeneficiarytolosscoverage):

• Deathofthecoveredemployee.• Termination(otherthanforgrossmisconduct),orreductionofhours,ofthecovered

employee’semployment.• Thedivorceorlegalseparationofthecoveredemployee.• ThecoveredemployeebecomesentitledtoMedicare.• Adependentchildceasestobeadependentunderthetermsoftheplan.

• Theemployerfilesforbankruptcy.Thelossofcoverageincaseofbankruptcymayoccuranytimewithinoneyearbeforeorafterthebankruptcyfiling.54

Thecontinuationcoveragethatisavailabletoaqualifiedbeneficiarymustmeetthefollowingrequirements:• Thebenefitsofferedunderthecoveragemustbeidenticaltothebenefitsofferedunderthegroup

healthplantobeneficiarieswhohavenotexperienceda“qualifyingevent.”• Incaseofthecoveredemployee’sterminationorreductioninhours,thecoveragemustextendfor18

months.Ifasecondqualifyingevent,otherthantheemployer’sbankruptcy,occurswithinthefirst18months,thecontinuationcoveragemaybeextendedforatotalof36months.

• Forotherqualifyingevents,thecoveragemustcontinuefor36months.• Continuationcoveragemayterminateiftheemployereliminatesitsgrouphealthplanentirely.

50ERISA§601(b);PHSAct§2201(b)(1).COBRAestablishescontinuationrightsforprivateemployergrouphealthplansunder ERISA.Stateandlocalgovernmentemployers,whicharenotsubjecttothesubstantiverequirementsofERISA,mustneverthelesscomplywiththeCOBRAcontinuationrightunderthetermsofthePHSAct.51RIGLS.27-19.1-1.52ERISA§601(a);PHSAct§2201(a).53ERISA§607(3);PHSAct§2207(3).54ERISA§603;PHSAct§2203.

20

• EligibilityforCOBRAmaynotbebasedonevidenceofinsurability.55AqualifiedbeneficiarymayneedtopaythefullpremiumforCOBRAcoverage,plusuptoa2percentadministrativefee.Thatmeansthepremiumcanbeashighas102%ofthecostofcoverageforsimilarlysituatedindividualswhohavenothadaqualifyingevent,includingboththesharepaidbytheemployeeandbytheemployer.COBRAcoveragecanbeterminatediftheemployeefailstomakeapremiumpayment,butthequalifiedbeneficiaryhas45daysfromtheCOBRAelectiontomaketheinitialpremiumpayment.56

The“electionperiod”isthetimewithwhichthequalifiedbeneficiarymustnotifytheemployerofthechoicetoexerciseERISArights.Theelectionperiodbeginsonthedatecoveragewouldterminatebecauseofaqualifyingeventandlastssixtydays.57Coverageiseffectiveonthedateofthequalifyingevent,socoveragemaybeinstitutedretroactively.58

B. RhodeIslandExtendedBenefits

RhodeIslandlawprovidescontinuationrightsinadditiontothoseprovidedunderfederalCOBRA.Statestatutessuchasthesearesometimesreferredtoas“mini-COBRA”laws.RhodeIsland’slawhasadifferentscopethanCOBRA:itonlyappliestoinsuredgrouphealthplans,notself-insuredgrouphealthplans,andcoversallsuchplans,regardlessofemployersize,whereasCOBRAcoversallgrouphealthplansofemployerswithatleasttwentyemployees.However,RhodeIsland’sExtendedBenefitslawdoesnotapplytoemployersandemployeesintheconstructionindustrythatparticipateinaTaft-Hartleymulti-employerwelfareplan.59

UnderRIExtendedBenefits,anemployee,spouse,ordependentmaycontinuecoveragefor18monthsaftercoveragewouldbeterminatedduetolayoff,death,ortheworkplaceceasingtoexist.Thecontinuationcoveragecannotlastlongerthantheperiodoftimetheemployeewasemployedpriortothequalifyingevent,andterminateswhenevertheindividualincontinuationcoveragebecomeseligibleforbenefitsunderanothergroupplan.Theemployeeisresponsibleforpayingthefullpremiumrate(includingtheamounttheemployerwaspaying),butnomore.Iftheemployerplanhasfiftyorfewerplanparticipants,thepaymentsaremadedirectlytotheinsurer;otherwise,paymentsaremadetotheemployer.Theelectiontoparticipateincontinuationcoverageunderthisprovisionmustbemadewithinthirtydaysofthelayoffordeath.60

55ERISA§602;PHSAct§2202.56ERISA§§602(2)(C),(3),604;PHSAct§§2202(2)(C),(3),2204.57ERISA§605(a)(1);PHSAct§2205(a)(1).58ERISA§602(2);PHSAct§2202(2).59RIGLS.27-19.1-1(h).60RIGLS.27-19.1-1(a)-(c).

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K. AppendixD.TaxDocumentsforNewGroupsWithoutaQuarterlyTaxandWageReport

HSRIrequiresthemostrecentForm941(QuarterlyTaxandWageReport).Thedocumentsbelowmaybeusedwhenthegroupisn’trequiredbylawtofileorhasn’tbeeninbusinesslongenoughtofile.

BUSINESSTYPE INBUSINESSMORETHAN3MONTHS INBUSINESSLESSTHAN3MONTHSC-Corps Form941(QuarterlyTaxandWageReport)OR

Mostrecentpayrollreportfromathirdpartypayrollprocessingcompany(e.g.,ADPorPaychex)

Mostrecentpayrollreportfromathirdpartypayrollprocessingcompany(e.g.,ADPorPaychex)OR

CopyofBusinessApplicationandRegistrationformsubmittedtoRIDivisionofTaxationandW-4’s

S-Corps Form941(QuarterlyTaxandWageReport)OR

Mostrecentpayrollreportfromathirdpartypayrollprocessingcompany(e.g.,ADPorPaychex)

Mostrecentpayrollreportfromathirdpartypayrollprocessingcompany(e.g.,ADPorPaychex)OR

CopyofBusinessApplicationandRegistrationformsubmittedtoRIDivisionofTaxation

PARTNERSHIPS FOREMPLOYEESWHOAREPARTNERS FOREMPLOYEESWHOAREPARTNERS(GeneralpartnerswillnothaveForm941orW-2.IncomeinformationisfoundonScheduleK-1–line15A).

ScheduleK-1(Partner’sShareofIncome)ORScheduleSE(Self-employmentTax)ORForm1065(PartnershipReturnofIncome

AND

Foremployeeswhoarenotpartners:Form941(QuarterlyTaxandWageReport)OR

Mostrecentpayrollreportfromathirdpartypayrollprocessingcompany(e.g.,ADPorPaychex)

Affidavit(forowner/employeenotonpayroll)andsupportingdocumentation

AND

Foremployeeswhoarenotpartners:Mostrecentpayrollreportfromathirdpartypayrollprocessingcompany(e.g.,ADPorPaychex)

LimitedLiabilityCompany(LLC)

MayfileasaC-CorporaPartnershipDeterminewhichoneandseerequirementsabove.

MayfileasaC-CorporaPartnershipDeterminewhichoneandseerequirementsabove.

INDEPENDENTCONTRACTORSIndependentContractors Form1099-MISC Affidavit(forowner/employeenotonpayroll)and

supportingdocumentationFARMS

ScheduleF(ProfitorLossFromFarming) Mostrecentpayrollreportfromathirdpartypayrollprocessingcompany(e.g.,ADPorPaychex)OR

Affidavit(forowner/employeenotonpayroll)andsupportingdocumentation

NON-PROFITORGANIZATIONS Therearemanyformsthatmaybefiledundernon-profitstatus.Thebestwaytodeterminewhichformisusedistoaskthegroup

whichformtheyactuallyfilewiththegovernment.Churches/religiousorganizationsmayhaveK-2/W-2formsevenwhennon-profit.

TaxDocumentsforNewGroupswithoutaQuarterlyTaxandWageReport