Director McPharlin Requests One-Year Delay for Vertical Choice on the SHOP Marketplace

In accordance with the 2017 Payment Notice and subsequent guidance, CMS granted states the ability to annually recommend its Federally-facilitated SHOP (FF-SHOP) not make vertical choice available, where vertical choice is defined as the ability of the employer to choose from any available plan from a single issuer. Director McPharlin officially requested that CMS not implement vertical choice in the SHOP Marketplace to U.S. Department of Health and Human Services Secretary Sylvia Mathews Burwell on March 25, 2016. CMS approval is needed on this recommendation.

The determination to request that CMS not implement vertical choice was made due to concerns that it added administrative complexity to a program with little enrollment, and the belief it could potentially lead to adverse selection and higher rates across the small group market.