17 States and Washington, D.C., Implementing 'SHOP' Health Insurance
Marketplaces for Small Businesses; Most Offer Employees Competitive Choice of
Plans and Insurers
States Have Focused on Features That Will Make SHOP Marketplaces Attractive
to Small Businesses, Prioritizing Predictable Costs, Standard Participation
Requirements, and Ease of Shopping
Contact(s):
Mary
Mahon
Public Information Officer
TEL 212-606-3853, cell phone
917-225-2314, mm@cmwf.org
Bethanne
Fox
Senior Associate
301-448-7411, bf@cmwf.org
Related : "Choice of Insurers and Plans in the 'SHOP' Health Insurance Marketplaces for Small Businesses"
New York, NY, March 14, 2014—Seventeen states and the
District of Columbia are running their own Small Business Health Options
Program (SHOP) marketplaces, where small firms can buy health insurance for
their employees, while the federal government isl operating SHOP marketplaces in
the remaining 33 states, according to a new Commonwealth Fund study. In Implementing
the Affordable Care Act: State Action to Establish SHOP Marketplaces, Sarah
Dash and colleagues at Georgetown Universityfs Center on Health Insurance
Reforms report that most states running their own marketplaces seek to encourage
small-business participation by focusing on features that were previously
unavailable, such as being able to offer employees a choice of plans and set a
predictable contribution toward their coverage.
States have sought to improve the availability of small-group coverage by
implementing standard participation requirements and offering competitive
choices of insurers and plans. They also have aimed to improve the shopping
experience by providing online access to personalized assistance.
The Affordable Care Actfs SHOP marketplaces, along with federal tax credits
for small businesses that provide health insurance to their employees and new
insurance market reforms, are intended to improve access to health coverage for
small business owners and their employees. SHOP marketplaces are open to
employers with 50 or fewer full-time equivalent employees, and tax credits are
available for employers with fewer than 25 employees making an average of less
than $50,000. The report notes that small-business owners have struggled to
provide affordable, comprehensive health benefits to their employees, who are
more likely to be uninsured or underinsured than workers in large firms.
gFor years, our research has shown that small-businesses owners and their
employees are often priced out of the health insurance market, have very limited
options when it comes to insurance, or are forced to select plans with high
premiums and limited benefits,h said Commonwealth Fund President David
Blumenthal, M.D. gThe health reform lawfs market reforms and SHOP marketplaces
are an opportunity for small businesses to finally provide a range of
affordable, comprehensive coverage options to their employees.h
According to the new study, nearly all states have attracted enough
competition to offer small-business employers and employees a choice of insurers
and plans. However, state offerings vary widely. For example, the Connecticut
SHOP marketplace is offering 12 plans, compared to 267 in the District of
Columbia. The number of insurers participating also varies, ranging from one in
Washington to 10 in New York.
Additional notable SHOP marketplace features from the report:
- Nearly all states have opted to offer small employers a key feature
generally not available outside the SHOP marketplaces: the ability to offer
employees a choice of plans from multiple insurers, while making predictable
contributions towards coverage. Seven states—Hawaii, Minnesota, New York,
Oregon, Rhode Island, Utah, and Vermont—have chosen to go beyond the lawfs
requirements by allowing employers to give employees the choice of any plan in
the SHOP marketplace. The Affordable Care Act requires only that states allow
employers to choose a plan tier—bronze, silver, gold, or platinum—and then let
employees pick any plan in that tier.
- For 2014, the 14 states that, along with the District of Columbia, are
allowing employers to offer a choice of plans also make it possible for
employers to make a fixed premium contribution toward their employeesf
insurance, regardless of which plans workers choose.
- Most states have added tools to help employers shop for plans online. At
least 12 states and the District of Columbia allow employers to browse
coverage options without submitting any identifying information.
- Ten states and the District of Columbia are offering an online
calculator for employers to determine their eligibility for tax credits, and
nearly all states are offering an online directory of navigators, in-person
assistants, agents, and brokers.
gStates creating their own SHOP marketplaces understood what small business
owners wanted and worked to make their marketplaces attractive to them,h said
Georgetownfs Sarah Dash, the lead author. gAllowing small businesses to pool
their purchasing power in a SHOP-like mechanism is not a new idea, but it has
never before been available to small businesses in every state. Now that many
states have laid the groundwork for their SHOP marketplaces, it will take time
to work through initial start-up challenges, whether related to technology or to
the more fundamental challenges that have always been associated with attracting
customers to a new business. It will be critical to monitor how the state-run
SHOP marketplaces fare with enrollment and customer satisfaction to see what
improvements may need to be made.h
The states and the federal government are in various stages of launching
their SHOP marketplaces. Depending on the state, small employers currently may
enroll in SHOP plans online, directly with insurers, or through agents and
brokers. For example, the 33 states where the federal government is running the
SHOP marketplaces do not have online enrollment, but small businesses can
purchase plans directly from insurers or through agents and brokers. States such
as California and Maryland have taken a similar approach.
As additional
states bring their marketplaces online and fully implement features, such as
employee choice, that are important to small employers, it will be crucial for
state and federal policymakers to monitor enrollment and consumer experiences to
ensure the SHOP marketplaces are effective in helping small businesses provide
affordable insurance options to their employees.