Kentucky’s Exchange still carries a full set of small-group rules, and they are current law. The purchasing channel is closed to new employer enrollment, but Kentucky’s own Exchange chapter — Title 900, Chapter 010 — keeps its SHOP eligibility, application and formal-review sections in force. The rulebook did not change when the shelf emptied.
Those are separate facts, and searching for the first one usually buries the second. Below is where Kentucky keeps its Exchange rules, what those rules mean by SHOP, why a state can hold a complete rulebook and still have nothing on the shelf, and what survives the closure.
Kentucky keeps its Exchange rules in their own chapter
The Kentucky Health Benefit Exchange is not governed only by statute. It has its own chapter of administrative regulations, and the Legislative Research Commission serves the whole chapter with a status column: Title 900, Chapter 010 — Kentucky Health Benefit Exchange.
Read the status column rather than the titles, because the chapter has been reorganized. The listing marks Regulation 111, Definitions for 900 KAR Chapter 10.
, as Current. It marks Regulation 115, on Exchange participation requirements and the certification of qualified health plans, as Current. And it marks Regulation 120 — the eligibility and enrollment regulation, whose catchline names SHOP and the SHOP formal resolution process — as Current as well.
It also marks a standalone SHOP regulation, Regulation 020, as Repealed, marks a standalone SHOP appeals regulation, Regulation 110, as Repealed, and marks Regulation 021, the regulation that repealed them, as Inactive.
That is worth getting straight, because it is easy to read backwards. Kentucky did not delete its SHOP rules. It moved them. The SHOP material now sits inside 900 KAR 10:120, which the same listing marks Current, and the Commission prints that regulation’s own vintage on its face:
HISTORY: (47 Ky.R. 2203; 48 Ky.R. 48; eff. 7-21-2021; 49 Ky.R. 124, 1263, 1402; eff. 1-12-2023.) · FILED WITH LRC: November 9, 2022 · 7-Year Expiration: 1/12/2030
An amendment cycle that closed in 2023 and an expiration date at the end of this decade are not the markings of an abandoned instrument.
What Kentucky’s own rules mean by SHOP
The definitions regulation looks like boilerplate and is not. Its subsection on SHOP does not define a word; it describes a machine, and it says exactly where the buying happens. From 900 KAR 10:111, Section 1:
(92) "SHOP" means a Small Business Health Options Program operated by the Kentucky Health Benefit Exchange through which small employers that meet the standards established in 45 C.F.R. 155.710 may obtain an eligibility determination from KHBE that allows the small employer to purchase one (1) or more QHPs or SADPs that have been certified by KHBE through either: (a) A participating agent; or (b) An issuer offering QHPs or SADPs on the KHBE.
Take the roles apart. The Exchange makes an eligibility determination and certifies plans. The purchase itself happens somewhere else — the regulation names a participating agent and an issuer as the routes, and names nothing else. Kentucky’s SHOP was never built as a store the Exchange runs; it was built as a determination the Exchange makes, attached to plans somebody else sells.
The companion subsection defines the employer on the other side of that determination:
(83) "Qualified employer" means an employer that elects to make, at a minimum, all full-time employees of the employer eligible for one (1) or more QHPs or SADPs in the small group market offered through the SHOP.
For size, the regulation points back at the statute
The same definitions section refuses to restate Kentucky’s small-employer band, and says so in a line of its own:
(94) "Small employer" is defined by KRS 304.17A-005(44).
That is worth noticing rather than skipping. The Exchange’s regulations adopt the insurance code’s definition by reference, so a Kentucky employer testing whether it is inside the small-group market is reading the statute, not the regulation. We take that definition apart in how many employees you need for a group plan in Kentucky, which is where the band belongs.
Why a state can have SHOP rules and no SHOP shelf
This is the part that explains the closure structurally, and it comes out of Kentucky’s participation regulation rather than out of any announcement. 900 KAR 10:115 opens by setting out what an issuer has to do to be on the Exchange at all:
Section 1. Participation Standards for Issuers Offering a Qualified Health Plan. In order to participate on KHBE, an issuer offering a QHP shall: (1) Hold a certificate of authority that would permit the issuer to offer a health benefit plan and be in good standing with the Kentucky DOI; (2) Be authorized by the division to participate on the KHBE; (3) By February 1 of each year, submit Form KHBE-C1, Issuer Participation Intent Form, a nonbinding notice of intent to participate on KHBE during the next calendar year; (4) Enter into a participation agreement with the division; (5) Offer KHBE certified QHPs in the individual exchange or SHOP;
The words that carry the whole answer there are the regulation’s own. The annual notice of intent is nonbinding — Kentucky says so in the text, not as a gloss. And the election in subsection (5) is the individual exchange or SHOP, joined by or rather than by and.
The regulation does attach a duty to an issuer that has elected SHOP:
(15) For SHOP, offer at least a: (a) QHP with a silver metal level of coverage; and (b) QHP with a gold metal level of coverage;
But that duty runs to an issuer that has already elected SHOP. Kentucky’s Exchange participation rule leaves the election itself to the issuer, and it renews annually, cited to 900 KAR 10:115 Section 1(5) — which is what this post read. A program supplied that way has nothing for an employer to buy in a year when the election is not made, while every line of its eligibility and appeal machinery keeps running over an empty shelf.
That is a structural answer, and it should be read as exactly that. It says what Kentucky’s rules make possible. It is not a causal account of why the shelf emptied: no Kentucky primary source read for this post gives a reason.
The employer-side rules that are still in force
900 KAR 10:120 is where the SHOP employer sections live now, and they run as a block. The section catchlines, verbatim and in order:
Section 15. SHOP Employer Eligibility. · Section 16. SHOP Right to Formal Review. · Section 17. SHOP Dismissal of a Formal Review. · Section 18. SHOP Desk Review. · Section 19. SHOP Formal Review Decision. · Section 20. SHOP Formal Review Record.
Sections 15 through 20 are addressed to SHOP employers and to nothing else, and they are current. Section 15 sets out who qualifies, what the plan year is, where the enrollment actually happens, and what occurs when a business outgrows the definition:
(1) An employer shall be a qualified employer and eligible to purchase coverage through SHOP if the employer meets the eligibility requirements established in 45 C.F.R. 155.710(b). … (5) A qualified employer may purchase coverage for its qualified employees at any time during the year. … (6) An employer’s plan year shall be the twelve (12) month period beginning with the effective date of coverage. … (7) An employer shall enroll in a QHP or SADP certified by the division by contacting an issuer or a participating agent. … (8) A qualified employer who ceases to be a small employer by reason of an increase in the number of employees shall be eligible to participate in SHOP until the employer: (a) Fails to otherwise meet the eligibility criteria of this section; or (b) Chooses to no longer purchase health coverage.
Read subsection (7) beside the definition quoted earlier and the design is consistent throughout: the Exchange determines, and the enrollment happens with an issuer or an agent. Section 15 also sets a minimum group participation requirement for a qualified employer and routes its calculation to a federal method; the requirement is named here and its figure is deliberately not printed, for the reason given in this post’s omission ledger.
A caution that matters more than any of the text above. These sections are reported here as the state of Kentucky’s rules. They are not a route to follow. Kentucky’s regulations still set out how a small employer qualifies for SHOP, how it is found eligible and what it may do if that determination goes against it — and the purchasing channel those rules describe is closed to new employer enrollment. The rulebook was not amended when the channel closed, so a current, correctly quoted subsection can still send an employer somewhere that will not help. If you are setting up group coverage in Kentucky today, start with our Kentucky page or ask us for a quote, not with Section 15.
What happens if an eligibility determination goes against an employer
Kentucky did not leave the appeal side to practice. It wrote it down, and it put deadlines on each side of it. From Section 16 of the same regulation:
(b) Failure of the KHBE to make an eligibility determination to participate in SHOP within fifteen (15) calendars days of receiving an application from an employer. … (2) Within ninety (90) days of receipt of a notice of denial of eligibility, an employer may submit a formal review request to the division by: (a) Telephone; (b) Mail; or (c) Email.
The misspelling in that first clause is the regulation’s own, and it is reproduced rather than tidied — a quotation that has been silently corrected is no longer a quotation.
Section 17 governs dismissal, and puts a clock on the notice and on the employer’s response:
(a) Within three (3) business days of the dismissal; and (b) That includes the reason for dismissal. … if an employer makes a written request within thirty (30) days of the date of the notice of dismissal…
And Section 20, on the formal review record, goes as far as fixing when the record is available:
(2) During regular business hours, which shall: (a) Be Monday through Friday from 8:00 a.m. to 4:30 p.m.; and (b) Exclude holidays.
Kentucky has kept a desk-review procedure and reading-room hours on the books.
What the closure changes, and what it does not
The closure is real and it is not in dispute. The Exchange’s own SHOP page tells employers the route is shut to new enrollment and directs them to a licensed agent or broker instead.
What the closure does not do is any of the following. It does not repeal 900 KAR 10:111, 900 KAR 10:115 or 900 KAR 10:120. It does not remove the definition of a qualified employer from Kentucky law. It does not withdraw the formal review path. And it does not make any of the sentences people reach for — that Kentucky has no SHOP, that Kentucky shut SHOP down, that Kentucky’s Exchange has nothing to do with employers — true. Each of those is contradicted by a regulation that is current today.
It is recent history, too. When CMS gave Kentucky conditional approval for its state-based Exchange, the federal word for what Kentucky was doing was re-establish: the letter congratulates the Kentucky Health Benefit Exchange, also known as kynect, on reaching that milestone. kynect is the Commonwealth’s consumer brand for its Exchange, and the relationship between that brand and the agency behind it is untangled in what a group health plan is and how it works in Kentucky. The same letter says nothing whatever about SHOP — the words simply do not appear in it — so it is history, not mechanism.
How to read a Kentucky regulation without quoting the wrong copy
The Legislative Research Commission serves each regulation twice on the same page. The operative text comes first. Further down, under a heading offering an alternate view of how the document appeared before it was engrossed, the same regulation appears again — and the second copy can carry wording that did not survive into law. On the regulations quoted in this post, a naive read of the whole page interleaves stray pre-engrossment phrases into what looks like continuous running text.
A search, a browser find or a copy-and-paste returns whichever copy it reaches first, and nothing on screen tells you which one you landed in. Finding your sentence on the page is not evidence that your sentence is the law.
The habit that fixes it: split the page at the second appearance of the regulation’s own number-and-catchline heading, and treat everything before that point as the current text. Then look for your passage in each part separately. If it appears in each and the wording is identical, you have the operative text. If the parts disagree, you have found an engrossment change, and the first copy wins. Every passage quoted in this post was checked that way before it was quoted.
Kentucky’s Exchange rulebook is a working document with a live expiration date, an amendment history and an appeal path inside it. It deserves to be read as one.
The bottom line
Kentucky’s Exchange stopped being a place a small employer can buy coverage, and it did not stop having rules about small employers. Title 900, Chapter 010 is current: it defines SHOP, defines a qualified employer, sets out how an employer is found eligible, and gives a formal review path if that determination goes against the employer. The closed channel and the live rulebook are separate facts, and only the channel has changed.
Frequently asked questions
Does Kentucky still have Exchange rules for small groups?
Yes. The Kentucky Health Benefit Exchange has its own chapter of administrative regulations, Title 900, Chapter 010, and the Legislative Research Commission’s chapter listing marks the definitions regulation, the issuer-participation regulation and the eligibility-and-enrollment regulation as Current. The eligibility-and-enrollment regulation carries the SHOP employer sections, and it does not expire until the end of this decade.
Can a Kentucky small employer still buy coverage through SHOP?
No. The Exchange’s own SHOP page tells employers the route is closed to new enrollment and points them to a licensed agent or broker instead. That is a statement about the purchasing channel. It is not a statement that the rules were withdrawn, and the regulations that govern SHOP eligibility and SHOP formal review are still current.
How can Kentucky have SHOP rules and no SHOP shelf?
Because Kentucky’s participation rule leaves the decision to the issuer. 900 KAR 10:115 Section 1 requires an issuer that wants to be on the Exchange to file an intent form each year, calls that notice nonbinding in its own words, and lets the issuer elect the individual exchange or SHOP. A program supplied that way has nothing to sell in a year when no issuer elects it, while every eligibility and appeal rule stays on the books.
What happened to Kentucky’s standalone SHOP regulation?
Kentucky no longer has a standalone SHOP regulation or a standalone SHOP appeals regulation. The chapter listing marks both as Repealed and marks the repealer as Inactive. The chapter’s SHOP sections now sit inside 900 KAR 10:120, which the same listing marks Current — so the change was a consolidation of where the rules live, not a removal of the rules.
Why does a Kentucky regulation appear twice on the state’s website?
The Legislative Research Commission serves the operative text and then, further down the same page, an alternate view showing how the document appeared before it was engrossed. The alternate copy can carry wording that is not the law. A search, a browser find or a copy-and-paste returns whichever copy it reaches first, so check which part of the page your text came from before relying on it.
About the author
Nate Jones, CPCU, is the founder of Wexford Insurance and Wexford Health Insurance, an independent agency placing small-business group benefits in 9 states. Nate reads Kentucky’s Exchange regulations in Title 900 off the Legislative Research Commission’s own served text, and checks the operative copy against the pre-engrossment copy the site serves beside it, before telling a Kentucky employer what the rules say. Start with the Wexford Health Insurance quote form.