SHOP Exchanges Taking a Slice of Small Biz Market

Christopher Cheney, for HealthLeaders Media , March 18, 2014

Alongside the more publicized individual public health insurance exchanges, a relatively new public marketplace for small business health insurance offers another choice to employers.

Federal and state Small Business Health Options Program marketplaces opened since the fall are developing slowly, but the SHOP exchanges show great promise to transform small employer health insurance, according to carriers, state officials, and a Commonwealth Fund study.

Seventeen states and the District of Columbia have opened SHOP exchanges since October, with the federal government operating the small business marketplaces in the remaining states. The performance of the SHOP exchanges varies from state to state, and none of the federally operated exchanges have automated billing or administration, says Sarah Dash, one of the authors of the Commonwealth Fund study and a research fellow at the Georgetown University Health Policy Institute in Washington.

"Basically, there's still a small business market outside the SHOP," she said in interview Friday. "There are still a lot of things in play in terms of enrollment."

Dash says several factors are depressing SHOP exchange enrollment levels, including the federal government's decision to allow renewals of small business health insurance policies through fall 2016, even if they do not comply with the PPACA. "Early renewal takes a whole chunk out of the market that could have entered the SHOP," she said. "They are taking a big customer base out of the SHOPs."

The SHOP exchanges have rolling enrollment, which has eroded employer urgency to join the new market, Dash said. "They have a rolling ability to enroll, so there's not been this rush to a deadline like March 31 [on the individual public exchanges]…We're really just at the beginning."

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1 comments on "SHOP Exchanges Taking a Slice of Small Biz Market"

Michael Lujan (3/18/2014 at 4:36 PM)
The value of value will prove itself over time. The first was mostly about enrollment in the individual market. In most states, the small group market was relatively stable with guaranteed coverage for small employers. In CA, we've had something like SHOP since 1993 and still have private exchange products for small groups. If SHOP can offer unique plans (e.g. Medicaid plans normally not offered in the commercial market) and leverage their public exchange platform to also enroll part-time workers not eligible for group coverage... they may have an advantage in the commercial segment. Enrollment in SHOP will grow starting August through Dec 2014 when they begin to capture groups who chose "early renewal" in Q4 2013. So much of this will depend on public exchanges embrace and support of Certified Agents who serve the employer market. Since nearly 90% of small employers work with licensed agents, exchanges would be wise to provide dependable agent support and not work against this important enrollment channel. #AgentsAreTheAnswer




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