SHOP Exchanges Taking a Slice of Small Biz Market
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."