1. (a) An employer is a qualified employer and eligible to participate in the SHOP if such employer:

   1. (1) Is a small employer as defined in Section 6410;
   2. (2) Elects to offer, at a minimum, all eligible full-time employees coverage in a QHP through the SHOP;

   3. (3) Either --

      1. (A) Has its principal business address in California and offers coverage to all its full-time employees through the SHOP in California or
      2. (B) offers coverage to each eligible employee through the SHOP serving that employee's primary worksite;

   4. (4) Meets the following minimum participation rules:

      1. (A) A minimum of 70 percent of eligible employees of the qualified employer must enroll in health coverage through the SHOP, or a lesser minimum percent that may be determined by prevailing market practice through a SHOP survey of market practices. SHOP must provide QHP Issuers notice of such a change, if any, at least 210 days prior to the effective date of the proposed change, unless the QHP issuers agree to an earlier effective date for the proposed change. The percentage will be published on the Covered California for Small Business (CCSB) website.

         1. 1. If the qualified employer pays 100 percent of the qualified employees' QHP premiums, then all eligible employees not waiving coverage per Section 6522(a)(4)(B) of the qualified employer must enroll in health coverage through the SHOP.
      2. (B) A qualified employee who waives employer offered health coverage because that qualified employee is enrolled in coverage through another employer, an employee's union, Medicaid pursuant to 42 U.S.C. Section 1396 et seq., Medicare pursuant to 42 U.S.C. Section 1395 et seq., or any other federal or state health coverage program, or any health coverage meeting the definition of minimum essential coverage pursuant to Health and Safety Code Section 1345.5 is included with the qualified employees enrolling in coverage when calculating compliance with the group participation rules above.

   5. (5) Meets the following group contribution rule:

      1. (A) A qualified employer must contribute to each of its qualified employees' health plan premiums, a minimum of 50 percent of the lowest cost premium for employee-only health coverage in the level of coverage selected by the qualified employer pursuant to Section 6520(a)(12)(C), or a lesser minimum percent that may be determined by prevailing market practice through a SHOP survey of market practices. The contribution rate will be published on the CCSB website.
   6. (6) A qualified employer who wishes to offer infertility benefits to his/ her qualified employees must do so in accordance with Health and Safety Code Section 1374.55 and Insurance Code Section 10119.6.
2. (b) An employer that otherwise meets the criteria of this section except for subdivisions (a)(4)(A) and (a)(5)(A) of this section shall be a qualified employer, but may only elect to offer coverage to its employees during the period specified in Section 6526(b).
3. (c) A qualified employer who ceases to be a small employer solely by reason of an increase in the number of employees of such employer shall continue to be eligible for the SHOP until the qualified employer otherwise fails to meet the eligibility criteria of this section or elects to no longer purchase coverage for qualified employees through the SHOP.
4. (d) All qualified employees whose eligibility has been verified by the SHOP are eligible to enroll in a QHP through the SHOP.
5. (e) A qualified employee is eligible to enroll their dependent spouse, registered domestic partner, non-registered domestic partners, and dependent children, whose dependent eligibility has been verified by the SHOP, if the offer from the qualified employer includes an offer of dependent coverage.
6. (f) If an employer meets the criteria in subdivision (a) of this section and makes the election described in subdivision (a)(3)(B) of this section, a SHOP shall allow the employer to offer coverage to those employees whose primary worksite is in the SHOP's service area.
7. (g) A qualified employer shall immediately notify the SHOP of any change to the principal business location; if the new principal business address is in a different geographic rating area in California the SHOP shall only apply a new geographic rating factor upon renewal.

8. (h) The eligibility standards specified in this subdivision shall only apply to the eligibility determination for enrollment in a QDP through the SHOP:

   1. (1) Qualified employees may choose to enroll only in a dental plan even if the qualified employee does not choose to enroll in a health plan.
   2. (2) To enroll one child in a family in a QDP, all children in the family under 19 years of age shall also enroll in the same QDP.
   3. (3) A qualified employer may choose to offer dental plan coverage in a QDP only if the employer meets the 50 percent contribution requirement and 70 percent participation requirement of eligible employees for enrollment in that Group Dental Plan.

Note: Authority cited: Section 100504, Government Code. Reference: Sections 100502 and 100503, Government Code; and 45 CFR Sections 147.104, 155.705, 155.710, 155.715 and 155.720.

History

1. New section filed 9-30-2013 as a deemed emergency pursuant to Government Code section 100504(a)(6); operative 9-30-2013 (Register 2013, No. 40). A Certificate of Compliance must be transmitted to OAL by 4-1-2014 or emergency language will be repealed by operation of law on the following day.

2. New section refiled 4-1-2014 as a deemed emergency pursuant to Government Code section 100504(a)(6); operative 4-1-2014 (Register 2014, No. 14). A Certificate of Compliance must be transmitted to OAL by 6-30-2014 or emergency language will be repealed by operation of law on the following day.

3. New section refiled 6-30-2014 as a deemed emergency pursuant to Government Code section 100504, subdivision (a)(6), as modified by Senate Bill 857 (Stats. 2014, c. 31); operative 6-30-2014 (Register 2014, No. 27). A Certificate of Compliance must be transmitted to OAL by 9-30-2015 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.

4. New section refiled 10-2-2014 as a deemed emergency pursuant to Government Code section 100504, subdivision (a)(6), as modified by Senate Bill 857 (Stats. 2014, c. 31); operative 10-2-2014 (Register 2014, No. 40). A Certificate of Compliance must be transmitted to OAL by 9-30-2015 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.

5. Editorial correction of History 3 and History 4 (Register 2014, No. 45).

6. Senate Bill 75 (Stats. 2015, Ch. 18) modified Government Code section 100504(a)(6) to change the date upon which a Certificate of Compliance must be transmitted to OAL. Pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 75 (Stats. 2015, Ch. 18), a Certificate of Compliance must be transmitted to OAL by 9-30-2016 or the language in the emergency order of 10-2-2014 will be repealed by operation of law on the following day (Register 2015, No. 38).

7. Senate Bill 833 (Stats. 2016, c. 30) modified Government Code section 100504(a)(6) to extend the date upon which a Certificate of Compliance must be transmitted to OAL. Refiling of 10-2-2014 order on 9-30-2016 as a deemed emergency pursuant to Government Code section 100504(a)(6); operative 9-30-2016 (Register 2016, No. 40). A Certificate of Compliance must be transmitted to OAL by 10-1-2018 pursuant to Government Code section 100504(a)(6) or emergency language will be repealed by operation of law on the following day.

8. Refiling of 9-30-2016 order, including amendment of section heading and further amendment of section, on 11-28-2016 as a deemed emergency pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 833 (Stats. 2016, c. 30); operative 11-28-2016 (Register 2016, No. 49). A Certificate of Compliance must be transmitted to OAL by 10-1-2018 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.

9. Refiling of 11-28-2016 order, including new subsections (h)-(h)(3), on 4-17-2017 as a deemed emergency pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 833 (Stats. 2016, c. 30); operative 4-17-2017 (Register 2017, No. 16). A Certificate of Compliance must be transmitted to OAL by 10-1-2018 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.

10. Refiling of 4-17-2017 order, including further amendment of section, filed 4-20-2018 as a deemed emergency pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 833 (Stats. 2016, c.30); operative 4-20-2018 (Register 2018, No. 16). A Certificate of Compliance must be transmitted to OAL by 10-1-2018 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.

11. Certificate of Compliance as to 4-20-2018 order, including amendment of subsections (a)(4)(A)-(a)(4)(A)1. and (a)(5)(A) and amendment of Note, transmitted to OAL 8-3-2018 and filed 9-17-2018 (Register 2018, No. 38).

12. Amendment of subsections (a)(4)(A)-(B), (a)(5)(A) and (h)-(h)(3) filed 9-7-2021 as an emergency; operative 9-7-2021 (Register 2021, No. 37). Pursuant to Government Code section 100504(a)(6)(A), a Certificate of Compliance must be transmitted to OAL by 9-7-2026 or emergency language will be repealed by operation of law on the following day.

13. Certificate of Compliance as to 9-7-2021 order, including further amendment of subsections (a)(4)(A), (a)(4)(B) and (e), transmitted to OAL 8-22-2024 and filed 9-23-2024; amendments effective 9-23-2024 pursuant to Government Code section 11343.4(b)(3) (Register 2024, No. 39).

14. Amendment of subsection (a)(4)(B) filed 1-20-2026; operative 1-20-2026 pursuant to Government Code section 11343.4(b)(3) (Register 2026, No. 4).