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SHOP Exchanges Taking a Slice of Small Biz Market

Christopher Cheney, for HealthLeaders Media, March 18, 2014

'Two-Fold Value Proposition'
Jim Sugden, small business marketplace manager at Connect for Health Colorado, says he is optimistic about the long-term prospects of the SHOP exchange in the Centennial State. "We are finding our way along. We are off to a slow start, but it's a new concept," Sugden said in an interview.

The Colorado exchange official said the SHOP exchanges offer a level of choice to employers and their employees which has been elusive in the past. "Our value proposition is two-fold," Sugden said, noting a small percentage of employers are eligible for a small business tax credit. "A larger number of employers will find the larger choice more attractive… I know this can work because choice is a winner if you present it properly. You have to frame the choice in terms of being meaningful for the employees."

Connect for Health Colorado, described as a quasi-public entity by its CFO, Cammie Blais, offers 96 plan designs from six carriers on its SHOP exchange. As of March 1, there were 176 groups enrolled, with about 1,600 individuals either receiving or slated to receive benefits, Sugden said.

The Colorado SHOP exchange should be able to seize a significant share of the state's small business health insurance market, he believes. "I'd really like to see us have 25 to 30 percent of the market," Sugden said, adding the Colorado SHOP exchange could be "financially sustainable" as early as January 2016. "If you look at a business plan for most businesses, you get three, four, or five years to be sustainable."

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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